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Applied Materials, Inc. (AMAT)

Fair Value
TechnologySemiconductor Equipment & MaterialsUnited States

Fundamental

71

Price

$377.24

Market Cap

$324.81B

Part 1 · What the company is worth

Overview

Applied Materials makes the machines that chipmakers use to build semiconductors — the equipment that deposits, etches and measures the microscopic layers on a silicon wafer. It does not make chips itself; it sells capital equipment to the foundries, memory makers and logic producers that do, and then earns recurring revenue servicing and supplying parts for the enormous base of machines already installed in fabs around the world.

How it makes money

Selling a new fabrication tool is a large, lumpy capital sale tied to a chipmaker's decision to build or expand a factory, so this revenue rises and falls sharply with the semiconductor investment cycle. The services business (Applied Global Services) is steadier: it scales with the growing installed base of machines that need parts, upgrades and maintenance regardless of whether customers are currently buying new equipment.

Revenue by segment

Semiconductor Systems73%

Fabrication equipment sold to foundry, logic, DRAM and NAND memory manufacturers to build and expand chip factories.

Applied Global Services23%

Spare parts, upgrades and maintenance for the large installed base of Applied equipment already running in customer fabs.

Competitive moat

Switching costs · Wide

Qualifying a new piece of fabrication equipment into a chipmaker's production process takes years of testing, and once a tool is embedded in a qualified recipe, ripping it out risks the yield of an entire product line. That makes Applied's installed base extremely sticky and turns the services attached to it into a long-lived, high-margin annuity.

What drives demand

Cyclical

Semiconductor capital spending is famously volatile: chipmakers overbuild capacity in booms and then pause purchases for quarters at a time to digest it, and Applied's equipment orders move with that cycle well before end-market chip demand itself changes. Services revenue, tied to the installed base rather than new orders, is the main counterweight to that swing.

Key risks

  • Customer concentration — Two customers together made up about a third of fiscal 2025 revenue; a pause or shift in either one's fab investment plans has an outsized effect on results.
  • Geographic concentration in Asia — The Asia Pacific region, including China, Korea and Taiwan, accounts for roughly 86% of net revenue, concentrating the company's exposure to any single region's economic or political disruption.
  • Export controls and trade restrictions — US government restrictions on selling advanced semiconductor equipment to China have already reduced the company's addressable market and prompted regulatory inquiries; the rules can tighten further with little notice.
  • Cyclicality of chipmaker capital spending — Customers' decisions to build or delay new fab capacity are volatile and largely outside Applied's control, driving sharp swings in new equipment orders that services revenue only partly offsets.

Customer concentration

Top customers account for 34% of revenue

In fiscal 2025 two customers accounted for approximately 19% and 15% of net revenue respectively, together roughly a third of the total. A shift in either customer's capacity spending plans would move company-wide results.

The case for

Buyers argue that the shift toward AI chips requires more complex, higher-value fabrication steps that play to Applied's technology strengths, and that the growing services business built on its enormous installed base provides a steadier earnings floor than the equipment cycle alone would suggest.

The case against

Sellers worry that heavy revenue concentration in a handful of customers and in Asia leaves Applied exposed to both a single company's spending decisions and to further export restrictions on sales to China, on top of the semiconductor industry's ordinary boom-and-bust equipment cycle.

Written by the editors, published on August 18, 2026

Direct competitors

Who this company fights with for the same customers

Compare

Generated with artificial intelligence on August 23, 2026, shared with all users

P/E: 39.9Score: 79Market cap: $330.27B

Lam Research sells the etch, deposition and wafer-clean tools that sit at the heart of Applied Materials' Semiconductor Systems business, so the two bid against each other for the same process steps inside the same logic and memory fabs.

P/E: 39.8Score: 78Market cap: $216.55B

KLA is the reference supplier of inspection, metrology and process-control equipment, the segment where Applied Materials has been pushing its own eBeam and metrology tools to win a share of the same fab budget.

P/E: 40.4Score: 72Market cap: $632.67B

ASML is the largest wafer-fabrication-equipment vendor and sells to exactly the same customers as Applied Materials, so every euro a fab spends on lithography is capital equipment budget that Applied Materials is not capturing.

Tokyo Electron Limited (東京エレクトロン株式会社)8035

Tokyo Electron offers the broadest product overlap with Applied Materials after Lam — deposition, etch, thermal processing, cleaning and coater/developer systems — and sells them to the same handful of large chipmakers in Taiwan, Korea, Japan and the United States.

ASM International N.V.ASM

ASM International competes head-on in atomic layer deposition and epitaxy, two deposition technologies that are central to Applied Materials' transistor and gate-all-around product lines at the leading edge.

NAURA Technology Group Co., Ltd. (北方华创科技集团股份有限公司)002371

NAURA builds etch, CVD/PVD deposition, thermal and cleaning tools and has been qualified at Chinese fabs for process steps previously served by Applied Materials, making it the direct rival for AMAT's large China revenue base.

Balance Sheet & Liquidity

Revenue

$30.84B

Trailing 12 months (through 7/26/2026)

Net Income

$9.27B

Trailing 12 months (through 7/26/2026)

Free Cash Flow

$5.70B

Total Equity

$20.41B

Total Liabilities

$15.88B

Current Ratio

2.42

Interest Coverage

33.00

Debt/EBITDA

0.98

Earnings Per Share

Revenue & Net Income

Free Cash Flow

Income Breakdown

Historical statement

Margins over time

Debt over time

How heavy the debt is

Growth grid

Growth — Revenue

Fair Value Estimation

General caseFairly Valued

Fair Value

$373.53

Current Price

$377.24

Margin of Safety

-1.0%

Fair Value Range

$242.79 - $504.26

Spread across the valuation methods used, not a statistically calibrated confidence interval.

Estimation Methods

Analyst price target:$627.83
Discounted cash flow (DCF):$186.25
Earnings multiple (P/E):$302.82
Graham growth formula:$437.14
Earnings power value (EPV):$66.65
Justified P/B:$98.32
Dividend discount (Gordon):$18.73
P/FFO, funds from operations:$149.86
Mid-cycle earnings:$201.28
Revenue multiple:$207.82
Last Earnings Surprise:+1.08%

Valuation Metrics

P/E Ratio

32.58

ROE

34.3%

P/B Ratio

11.68

P/FCF

53.24

Gross Margin

49.4%

ROIC

21.8%

Profitability Radar

Value Creation (Economic Moat)

ROIC

21.8%

WACC

13.3%

ROIC − WACC

+8.5 pp

ROIC exceeds the cost of capital — the company is creating value for shareholders.

Fundamental Analysis Criteria

Passed (20)

  • EPS shows upward trend
  • EPS CAGR 11.61%
  • Price CAGR 30.84%
  • ROIC 21.8%
  • Gross margin 49.4%
  • Debt/equity ratio
  • Operating margin 29.6%
  • Positive free cash flow
  • Current ratio
  • Interest coverage
  • Debt/EBITDA
  • Return on tangible assets
  • Low reliance on intangibles
  • ROE 40.4%
  • Revenue growth 5Y 10.5%
  • Earnings surprise, average 3.5%
  • Earnings quality (operating cash flow / net income) 0.91
  • Share dilution -3.1%
  • Net margin trend 30.1% vs 23.9%
  • Piotroski F-Score 7/9

Failed (6)

  • P/FCF 53.24
  • P/B ratio 11.68
  • CapEx intensity
  • Price below Graham Number
  • DCF valuation (Overvalued)
  • PEG ratio 2.04

Unavailable (1)

  • Dividend payout –

Piotroski F-Score

7/9

Strong financial health

ROA > 0
Operating cash flow > 0
ΔROA > 0
Cash flow > net income
Leverage ↓
Current ratio ↑
No dilution
Gross margin ↑
Asset turnover ↑

Earnings Quality

0.91

Moderate: some gap between profits and cash

Share Dilution

-3.1%

Buying back shares. Shareholder friendly

Institutional Holdings

Governance

Executive Team

NameTitleAge
Mr. Gary E. DickersonPresident, CEO & Executive Director68
Mr. Brice A. HillSenior VP, CFO & leads Global Information Services58
Dr. Omkaram Nalamasu Ph.D.SVP, CTO, President Applied Ventures, LLC & Chair of the Growth Technical Advisory Board67
Dr. Prabu G. Raja Ph.D.President of Semiconductor Products Group62
Mr. Timothy M. DeaneSenior Vice President of Applied Global Services59
Mr. Adam SandersVP, Corporate Controller & Chief Accounting Officer53
Ms. Teri A. Little J.D.Senior VP, Chief Legal Officer & Corporate Secretary60
Mr. Joseph M. PonChief Public Affairs Officer and Corporate VP of Communications & Public Affairs-
Ms. Joji Sekhon GillSenior VP & Chief Human Resources Officer60
Mr. Charles W. ReadCorporate VP of Business Units & Operations CFO59

Audit Risk

2

Board Risk

2

Compensation Risk

2

Shareholder Rights Risk

1

Documents

  • Annual Report (10-K)

    A yearly overview of the business, its financial results, and the risks it faces.

    Filed on 2025-12-12

    View document
  • Quarterly Report (10-Q)

    A snapshot of financial performance for the most recent three-month period.

    Filed on 2026-08-20

    View document
  • Current Report (8-K)

    An announcement of a major event, such as a leadership change or big news.

    Filed on 2026-08-27

    View document

via SEC EDGAR

Income History

via SEC EDGAR

Part 2 · The price and its context

This part shows how the price has behaved, not whether the company is worth owning. Inside: technical analysis, potential, historical drawdowns, gamma exposure.

Market Reaction Profile

How much AMAT moves, measured on its daily prices.

VolatilityHigh

More volatile than 91% of the tracked stocks (90-day volatility).

Volatility 30d
55.2%
Volatility 90d
71.3%
Beta vs S&P 500 (1y)
2.75Correlation 0.58
Max drawdown (12m)
-48.1%
ATR (14d, % of price)
5.24%

Earnings reactions

How AMAT moved around its past quarterly results.

Next earnings release

Nov 12, 2026 · In 19 days · Time not known

EPS estimate: 4.06Revenue estimate: $10.3B

What usually happens

  • Over the last 12 releases the stock moved a median of 5.2% the next day, up or down.
  • Next-day moves: up 4, down 8 (out of 12).

Release history

DateWhen EPS est.EPS actualSurprise Gap 1 day5 days
Aug 13, 2026After the close2.722.86+5.2% -6.6% -5.1% -7.2%
May 14, 2026After the close2.252.38+5.9% -2.8% -0.9% -3.0%
Feb 12, 2026After the close2.142.17+1.6% +11.1% +8.1% +14.3%
Nov 13, 2025After the closen/an/an/a-8.7% +1.2% -1.3%
Aug 14, 2025After the closen/an/an/a-13.6% -14.1% -15.1%
May 15, 2025After the closen/an/an/a-3.6% -5.3% -8.1%
Feb 13, 2025After the closen/an/an/a-5.1% -8.2% -6.7%
Nov 14, 2024After the closen/an/an/a-9.5% -9.2% -5.5%
Aug 15, 2024After the closen/an/an/a-3.2% -1.9% -5.5%
Feb 15, 2024After the closen/an/an/a+7.7% +6.3% +5.1%
Nov 16, 2023After the closen/an/an/a-8.2% -4.0% -2.9%
Aug 17, 2023After the closen/an/an/a-0.2% +3.7% +3.6%

Release dates from SEC 8-K filings.

Updated 10/24/2026

Historical statistics for educational purposes only. They are not forecasts and not investment advice.

Price reaction to the news

Latest news on AMAT and what the price did next.

Return of the stock minus return of SPY over the same days. A news item close to a price move did not necessarily cause it. Historical data for educational purposes only, not investment advice.

Latest News

Recent headlines for AMAT.

  • 11d agoPOSITIVE
    Applied Materials’ $5 billion AI lab aims to cut chip development time in half—and restore Silicon Valley’s edge

    Applied Materials has launched its $5 billion EPIC chip R&D center, a significant investment aimed at accelerating semiconductor development. This initiative, undertaken with major industry partners like Intel, Micron, SK Hynix, and Samsung Electronics, is designed to halve chip development timelines. For investors, this move signals Applied Materials' commitment to innovation and its strategic importance in the AI hardware ecosystem. The facility's focus on cutting-edge research and collaboration could lead to increased demand for AMAT's equipment and solidify its market leadership, potentially boosting its stock performance.

  • 8/14/2026NEUTRAL
    Applied Materials shares are down on guidance and margin concerns. Analysts call it time to buy.

    Applied Materials shares experienced a decline due to concerns over its guidance and profit margins. However, analysts are advising investors to consider buying the stock, citing the semiconductor company's strong growth prospects. This growth is expected to be fueled by increased demand driven by the ongoing race to lead in the artificial intelligence industry. Despite short-term headwinds, the long-term outlook for AMAT remains positive, supported by its strategic position in a high-growth sector.

  • 8/14/2026POSITIVE
    Applied Materials shares are down on guidance and margin concerns. Here’s why analysts say it’s time to buy.

    Despite a recent dip in Applied Materials shares attributed to guidance and margin concerns, analysts are recommending a buy. The semiconductor equipment manufacturer is poised for continued growth, fueled by surging demand in the artificial intelligence sector. The race for AI dominance is a significant tailwind, suggesting that current price levels present an attractive entry point for investors anticipating future expansion and market share gains in this critical technology segment.

  • 8/14/2026NEGATIVE
    Applied Materials soffre nel pre-market nonostante terzo trimestre da record

    Applied Materials Inc. experienced significant selling pressure in pre-market trading, dropping approximately 6%, despite reporting a record third quarter. The company, a key player in semiconductor manufacturing equipment, saw its stock decline despite strong operational results. Investors may be reacting to forward guidance, broader market sentiment in the tech sector, or specific concerns not detailed in the initial report. This price action suggests a disconnect between the company's reported performance and market expectations, potentially signaling future headwinds or a re-evaluation of its valuation.

  • 6/17/2026POSITIVE
    Applied Materials Advances AI Wearables With SENZ Platform

    Applied Materials has launched its new SENZ platform, an integrated system designed to power AI-driven smart glasses. This innovative platform combines advanced optics with light engines, aiming to enhance the capabilities of wearable technology. The development signifies a strategic move by Applied Materials into the burgeoning AI wearables market, potentially opening new revenue streams and solidifying its position as a key technology provider in next-generation devices. Investors may view this as a positive step towards future growth and technological leadership.

  • 6/16/2026POSITIVE
    $1000 Invested In Applied Materials 10 Years Ago Would Be Worth This Much Today

    An investment of $1000 in Applied Materials (AMAT) made a decade ago would have grown significantly, highlighting the company's strong performance and market position over the past ten years. While specific figures are not provided in the summary, such a substantial hypothetical return suggests robust revenue growth, successful product innovation, and effective market penetration in the semiconductor equipment sector. Investors who held AMAT would have benefited from the increasing demand for advanced chips, driven by AI, 5G, and IoT technologies, underscoring the long-term potential of strategic investments in key technology enablers.

  • 5/18/2026POSITIVE
    If You Invested $100 In Applied Materials Stock 5 Years Ago, You Would Have This Much Today

    An investment of $100 in Applied Materials (AMAT) five years ago would have yielded a significant return, illustrating the company's strong performance in the semiconductor equipment sector. While specific figures are not provided in the title, the framing suggests substantial growth, likely driven by increased demand for advanced chip manufacturing technology. Investors who held AMAT stock would have benefited from the company's strategic position in supplying critical equipment to major chipmakers, navigating the cyclical but ultimately upward trend of the semiconductor industry over the past half-decade. This historical performance underscores AMAT's potential as a long-term growth investment.

  • 5/15/2026POSITIVE
    AI Demand Pushes Applied Materials To Highest Margins In 25 Years

    Applied Materials Inc. reported Q2 results that surpassed analyst expectations, driven by robust demand for its semiconductor manufacturing equipment fueled by the artificial intelligence boom. The company's margins reached a 25-year high, signaling strong pricing power and operational efficiency. Management also provided an optimistic forward-looking guidance, suggesting continued strength in the AI sector's impact on chip production. Investors will closely watch the company's ability to sustain this momentum amidst ongoing supply chain dynamics and capital expenditure cycles in the semiconductor industry.

  • 5/7/2026POSITIVE
    7 stocks expecting a post-earnings jolt — including Applied Materials and Cisco Systems

    Applied Materials Inc. (AMAT) is among seven stocks poised for a potential post-earnings surge, according to market indicators. While the article does not provide specific earnings figures for AMAT, its inclusion suggests positive sentiment or analyst expectations preceding its earnings report. The broader S&P 500 is also showing bullish momentum, indicating a favorable market environment that could amplify any positive earnings news for companies like Applied Materials. Investors will be watching AMAT's upcoming report for confirmation of growth drivers and future outlook.

  • 4/24/2026POSITIVE
    $1000 Invested In Applied Materials 15 Years Ago Would Be Worth This Much Today

    An investment of $1,000 in Applied Materials (AMAT) 15 years ago would have grown to a substantial amount today, underscoring the company's long-term growth trajectory and market position. While the exact figure is not provided, this historical performance suggests significant capital appreciation for shareholders. Applied Materials, a key supplier in the semiconductor equipment industry, has likely benefited from the secular growth trends in chip manufacturing, technological advancements, and increased demand for electronics. Investors looking at this data point should consider the company's consistent innovation, strategic market access, and its role in enabling the next generation of semiconductor technology.