Is Applied Materials a Better Buy Than Teradyne?
Teradyne surged 13% during the past Week. You may be tempted to buy more, or may want to reduce your exposure. But there is an entirely different perspective you might be missing. Is there a better alternative? Turns out, its peer Applied Materials gives you more. Applied Materials (AMAT) stock offers superior revenue growth across key periods, better profitability, and relatively lower valuation vs Teradyne (TER) stock, suggesting you may be better off investing in AMAT
- AMAT’s quarterly revenue growth was 7.7%, vs. TER’s 4.3%.
- In addition, its Last 12 Months revenue growth came in at 6.6%, ahead of TER’s 4.5%.
- AMAT leads on profitability over both periods – LTM margin of 30.1% and 3-year average of 29.4%.
These differences become even clearer when you look at the financials side by side. The table highlights how TER’s fundamentals stack up against those of AMAT on growth, margins, momentum, and valuation multiples.
Valuation & Performance Overview
| TER | AMAT | Preferred | |
|---|---|---|---|
| Valuation | |||
| P/EBIT Ratio | 59.7 | 24.8 | AMAT |
| Revenue Growth | |||
| Last Quarter | 4.3% | 7.7% | AMAT |
| Last 12 Months | 4.5% | 6.6% | AMAT |
| Last 3 Year Average | -4.3% | 4.4% | AMAT |
| Operating Margins | |||
| Last 12 Months | 18.8% | 30.1% | AMAT |
| Last 3 Year Average | 19.4% | 29.4% | AMAT |
| Momentum | |||
| Last 3 Year Return | 116.9% | 153.6% | AMAT |
Note: For “Last 3 Year Return” metric, preferred stock is one with higher returns unless the returns are too high (>300%) which creates risk of sell off.
See more revenue details: TER Revenue Comparison | AMAT Revenue Comparison
See more margin details: TER Operating Income Comparison | AMAT Operating Income Comparison
See detailed fundamentals on Buy or Sell AMAT Stock and Buy or Sell TER Stock. Below we compare market return and related metrics across years.
Historical Market Performance
| 2020 | 2021 | 2022 | 2023 | 2024 | 2025 | Total [1] | Avg | Best | |
|---|---|---|---|---|---|---|---|---|---|
| Returns | |||||||||
| TER Return | 77% | 37% | -46% | 25% | 17% | 58% | 199% | ||
| AMAT Return | 43% | 84% | -38% | 68% | 1% | 67% | 365% | <=== | |
| S&P 500 Return | 16% | 27% | -19% | 24% | 23% | 16% | 112% | ||
| Monthly Win Rates [3] | |||||||||
| TER Win Rate | 58% | 58% | 50% | 58% | 67% | 60% | 59% | ||
| AMAT Win Rate | 58% | 67% | 33% | 75% | 50% | 60% | 57% | ||
| S&P 500 Win Rate | 58% | 75% | 42% | 67% | 75% | 70% | 64% | <=== | |
| Max Drawdowns [4] | |||||||||
| TER Max Drawdown | -35% | -13% | -56% | -5% | -12% | -46% | -28% | ||
| AMAT Max Drawdown | -38% | 0% | -52% | -1% | -8% | -22% | -20% | ||
| S&P 500 Max Drawdown | -31% | -1% | -25% | -1% | -2% | -15% | -12% | <=== | |
[1] Cumulative total returns since the beginning of 2020
[2] 2025 data is for the year up to 12/8/2025 (YTD)
[3] Win Rate = % of calendar months in which monthly returns were positive
[4] Max drawdown represents maximum peak-to-trough decline within a year
No matter how good the numbers, stock investment is never a smooth ride. There is a risk you must factor in. Read AMAT Dip Buyer Analyses and TER Dip Buyer Analyses to see how these stocks have fallen and recovered in the past.
Still not sure about TER or AMAT? Consider portfolio approach.
Portfolios Over Individual Stock Picks
Stocks soar and sink – the key is staying invested. A balanced portfolio keeps you in the market, boosts gains and reduces single stock risk
The Trefis High Quality (HQ) Portfolio, with a collection of 30 stocks, has a track record of comfortably outperforming its benchmark that includes all 3 – the S&P 500, S&P mid-cap, and Russell 2000 indices. Why is that? As a group, HQ Portfolio stocks provided better returns with less risk versus the benchmark index; less of a roller-coaster ride, as evident in HQ Portfolio performance metrics.