Applied Materials Stock To $182?
Applied Materials (AMAT) stock has jumped 18% during the past month, and is currently trading at $259.01. Our multi-factor assessment suggests that it may be time to sell AMAT stock. We have, overall, a pessimistic view of the stock, and a price of $182 may not be out of reach. We believe there is a near-equal mix of good and bad in AMAT stock given its overall Moderate operating performance and financial condition. But keeping in mind its High valuation, we think that the stock is Unattractive.
Below is our assessment:
| CONCLUSION | |
|---|---|
| What you pay: | |
| Valuation | High |
| What you get: | |
| Growth | Inconsistent |
| Profitability | Strong |
| Financial Stability | Very Strong |
| Downturn Resilience | Weak |
| Operating Performance | Moderate |
| Stock Opinion | Unattractive |
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Let’s get into details of each of the assessed factors but before that, for quick background: With $206 Bil in market cap, Applied Materials provides manufacturing equipment, services, and software for semiconductor chip fabrication and display technologies, including liquid crystal displays and organic light-emitting diodes.
[1] Valuation Looks High
| AMAT | S&P 500 | |
|---|---|---|
| Price-to-Sales Ratio | 7.3 | 3.2 |
| Price-to-Earnings Ratio | 29.5 | 23.5 |
| Price-to-Free Cash Flow Ratio | 36.2 | 20.7 |
This table highlights how AMAT is valued vs broader market. For more details see: AMAT Valuation Ratios
[2] Growth Is Inconsistent
- Applied Materials has seen its top line grow at an average rate of 3.2% over the last 3 years
- Its revenues have grown 4.4% from $27 Bil to $28 Bil in the last 12 months
- Also, its quarterly revenues declined -3.5% to $6.8 Bil in the most recent quarter from $7.0 Bil a year ago.
| AMAT | S&P 500 | |
|---|---|---|
| 3-Year Average | 3.2% | 5.5% |
| Latest Twelve Months* | 4.4% | 6.0% |
| Most Recent Quarter (YoY)* | -3.5% | 7.3% |
This table highlights how AMAT is growing vs broader market. For more details see: AMAT Revenue Comparison
[3] Profitability Appears Strong
- AMAT last 12 month operating income was $8.5 Bil representing operating margin of 29.9%
- With cash flow margin of 28.1%, it generated nearly $8.0 Bil in operating cash flow over this period
- For the same period, AMAT generated nearly $7.0 Bil in net income, suggesting net margin of about 24.7%
| AMAT | S&P 500 | |
|---|---|---|
| Current Operating Margin | 29.9% | 18.8% |
| Current OCF Margin | 28.1% | 20.4% |
| Current Net Income Margin | 24.7% | 13.1% |
This table highlights how AMAT profitability vs broader market. For more details see: AMAT Operating Income Comparison
[4] Financial Stability Looks Very Strong
- AMAT Debt was $7.1 Bil at the end of the most recent quarter, while its current Market Cap is $206 Bil. This implies Debt-to-Equity Ratio of 3.4%
- AMAT Cash (including cash equivalents) makes up $8.6 Bil of $36 Bil in total Assets. This yields a Cash-to-Assets Ratio of 23.6%
| AMAT | S&P 500 | |
|---|---|---|
| Current Debt-to-Equity Ratio | 3.4% | 21.0% |
| Current Cash-to-Assets Ratio | 23.6% | 7.1% |
[5] Downturn Resilience Is Weak
AMAT has fared worse than the S&P 500 index during various economic downturns. We assess this based on both (a) how much the stock fell and, (b) how quickly it recovered.
2022 Inflation Shock
- AMAT stock fell 55.4% from a high of $167.00 on 14 January 2022 to $74.41 on 17 October 2022 vs. a peak-to-trough decline of 25.4% for the S&P 500.
- However, the stock fully recovered to its pre-Crisis peak by 19 January 2024
- Since then, the stock increased to a high of $275.15 on 10 December 2025 , and currently trades at $259.01
| AMAT | S&P 500 | |
|---|---|---|
| % Change from Pre-Recession Peak | -55.4% | -25.4% |
| Time to Full Recovery | 459 days | 464 days |
2020 Covid Pandemic
- AMAT stock fell 43.6% from a high of $67.41 on 19 February 2020 to $37.99 on 20 March 2020 vs. a peak-to-trough decline of 33.9% for the S&P 500.
- However, the stock fully recovered to its pre-Crisis peak by 14 August 2020
| AMAT | S&P 500 | |
|---|---|---|
| % Change from Pre-Recession Peak | -43.6% | -33.9% |
| Time to Full Recovery | 147 days | 148 days |
2008 Global Financial Crisis
- AMAT stock fell 64.5% from a high of $22.96 on 8 August 2007 to $8.14 on 20 November 2008 vs. a peak-to-trough decline of 56.8% for the S&P 500.
- However, the stock fully recovered to its pre-Crisis peak by 7 July 2014
| AMAT | S&P 500 | |
|---|---|---|
| % Change from Pre-Recession Peak | -64.5% | -56.8% |
| Time to Full Recovery | 2,055 days | 1,480 days |
But the risk is not limited to major market crashes. Stocks fall even when markets are good – think events like earnings, business updates, outlook changes. Read AMAT Dip Buyer Analyses to see how the stock has recovered from sharp dips in the past.
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