Applied Materials (NASDAQ:AMAT) Stock Falls 7.5% – What’s Next?

by · The Markets Daily

Applied Materials, Inc. (NASDAQ:AMAT – Get Free Report) traded down 7.5% on Friday. The stock traded as low as $382.62 and last traded at $390.09. Approximately 10,240,768 shares traded hands during mid-day trading, an increase of 30% from the average session volume of 7,880,454 shares. The stock had previously closed at $421.66.

Applied Materials News Roundup

Here are the key news stories impacting Applied Materials this week:

  • Positive Sentiment: Applied Materials’ planned move to raise its Besi stake to 20% is strengthening its exposure to hybrid bonding, a packaging technology that could benefit from rising AI-chip complexity. TIKR describes a bullish long-term scenario, with a potential price target of approximately $806 versus a roughly $628 Wall Street target. Applied Materials hybrid bonding analysis
  • Positive Sentiment: Recent coverage highlights a quarter with 51% growth and argues that AMAT trades at about 23 times forward earnings, a valuation that may look reasonable if AI-related semiconductor-equipment demand remains strong. The company also recently exceeded earnings and revenue estimates and issued fourth-quarter EPS guidance of $3.82–$4.22. Applied Materials growth and valuation analysis
  • Neutral Sentiment: AMAT is attracting unusually high investor attention, but the Zacks reports primarily review the company’s prospects rather than identify a new fundamental catalyst. Zacks Applied Materials investor attention report
  • Negative Sentiment: Compared with Taiwan Semiconductor Manufacturing, Applied Materials has shown a flatter revenue trajectory and less consistent quarter-over-quarter growth. That comparison may reinforce concerns that AMAT’s elevated valuation already discounts substantial AI-driven demand. Applied Materials versus Taiwan Semiconductor Manufacturing

Wall Street Analyst Weigh In

A number of analysts recently issued reports on the company. Evercore set a $590.00 price objective on Applied Materials in a report on Thursday, October 15th. UBS Group lifted their target price on Applied Materials from $675.00 to $695.00 and gave the company a “buy” rating in a report on Tuesday, September 1st. JPMorgan Chase & Co. upped their price target on Applied Materials from $515.00 to $660.00 and gave the company an “overweight” rating in a research report on Friday, August 14th. Wall Street Zen raised shares of Applied Materials from a “hold” rating to a “buy” rating in a report on Saturday, September 26th. Finally, Citigroup reissued a “buy” rating and issued a $710.00 price target (up from $550.00) on shares of Applied Materials in a report on Monday, August 3rd. Thirty analysts have rated the stock with a Buy rating and nine have issued a Hold rating to the stock. According to MarketBeat, Applied Materials has an average rating of “Moderate Buy” and a consensus price target of $632.70.

Get Our Latest Research Report on AMAT

Applied Materials Stock Down 7.5%

The company has a debt-to-equity ratio of 0.20, a current ratio of 2.42 and a quick ratio of 1.79. The company has a fifty day moving average price of $457.66 and a 200 day moving average price of $443.63. The company has a market cap of $309.58 billion, a PE ratio of 33.63, a price-to-earnings-growth ratio of 1.09 and a beta of 1.60.

Applied Materials (NASDAQ:AMAT – Get Free Report) last announced its earnings results on Thursday, August 13th. The manufacturing equipment provider reported $3.50 earnings per share for the quarter, beating analysts’ consensus estimates of $3.40 by $0.10. Applied Materials had a net margin of 30.05% and a return on equity of 38.02%. The business had revenue of $9.12 billion for the quarter, compared to the consensus estimate of $8.99 billion. During the same period last year, the firm posted $2.48 earnings per share. Applied Materials’s quarterly revenue was up 24.8% on a year-over-year basis. Applied Materials has set its Q4 2026 guidance at 3.820-4.220 EPS. As a group, analysts anticipate that Applied Materials, Inc. will post 12.79 EPS for the current year.

Applied Materials Dividend Announcement

The business also recently disclosed a quarterly dividend, which will be paid on Thursday, December 10th. Stockholders of record on Thursday, November 19th will be given a dividend of $0.53 per share. The ex-dividend date is Thursday, November 19th. This represents a $2.12 annualized dividend and a dividend yield of 0.5%. Applied Materials’s dividend payout ratio (DPR) is 18.28%.

Insider Activity

In other news, CFO Brice Hill sold 7,500 shares of Applied Materials stock in a transaction on Tuesday, August 25th. The shares were sold at an average price of $479.25, for a total transaction of $3,594,375.00. Following the completion of the sale, the chief financial officer directly owned 128,613 shares of the company’s stock, valued at approximately $61,637,780.25. The trade was a 5.51% decrease in their position. The transaction was disclosed in a legal filing with the SEC, which is accessible through this link. Also, Director Judy Bruner sold 1,000 shares of the company’s stock in a transaction on Tuesday, September 8th. The stock was sold at an average price of $465.00, for a total transaction of $465,000.00. Following the completion of the transaction, the director owned 25,544 shares of the company’s stock, valued at $11,877,960. This trade represents a 3.77% decrease in their ownership of the stock. The disclosure for this sale is available in the SEC filing. In the last quarter, insiders have sold 9,225 shares of company stock worth $4,454,181. 0.30% of the stock is currently owned by corporate insiders.

Institutional Investors Weigh In On Applied Materials

Several hedge funds have recently added to or reduced their stakes in the company. Ausdal Financial Partners Inc. purchased a new stake in Applied Materials during the 2nd quarter valued at about $4,005,000. Caldwell Investment Management Ltd. purchased a new position in Applied Materials in the second quarter worth about $1,589,000. CX Institutional raised its holdings in Applied Materials by 333.3% in the third quarter. CX Institutional now owns 25,853 shares of the manufacturing equipment provider’s stock worth $12,631,000 after buying an additional 19,886 shares during the last quarter. Principal Financial Group Inc. raised its holdings in Applied Materials by 3.0% in the second quarter. Principal Financial Group Inc. now owns 1,008,591 shares of the manufacturing equipment provider’s stock worth $729,211,000 after buying an additional 28,982 shares during the last quarter. Finally, Handelsbanken Fonder AB lifted its stake in shares of Applied Materials by 29.6% in the second quarter. Handelsbanken Fonder AB now owns 462,685 shares of the manufacturing equipment provider’s stock worth $334,521,000 after buying an additional 105,776 shares in the last quarter. Institutional investors own 80.56% of the company’s stock.

About Applied Materials

(Get Free Report)

Applied Materials, Inc is a technology company that supplies equipment, services and software used to manufacture semiconductors and advanced displays. Its products help customers fabricate the integrated circuits and other components used in computers, mobile devices, data centers, automobiles and a range of connected technologies.

The company’s offerings include systems for materials engineering, wafer fabrication, inspection and process control, along with equipment and services designed to improve manufacturing productivity and yield.

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