Applied Materials (NASDAQ:AMAT) Stock Jumps 1.4% – Still a Buy?

Shares of Applied Materials, Inc. (NASDAQ:AMAT) traded up 1.4% on Thursday. The company traded as high as $426.52 and last traded at $421.66. Approximately 6,599,820 shares changed hands during trading, a decline of 16% from the average daily volume of 7,868,716 shares. The stock had previously closed at $416.00.

Key Headlines Impacting Applied Materials

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

• Positive Sentiment: Memory shortage points to extended equipment demand. SK Hynix’s expectation that memory shortages could persist into 2030 implies years of additional fab construction and spending on wafer-fabrication equipment. This helped lift Applied Materials and other chip-equipment stocks in a recent semiconductor rally. Chip Equipment Stocks Rally as SK Hynix Signals Memory Shortage Into 2030
• Positive Sentiment: AI spending supports the long-term growth thesis. Investors are highlighting Applied Materials as an AI-related semiconductor hardware beneficiary, with demand spanning chip designers, manufacturers and equipment suppliers. The company is also described as a potentially undervalued, high-quality AI leader, while its valuation remains below the 43-times earnings threshold used in one AI-chip stock screen. Top 3 AI Chip Stocks With P E Under 43
• Positive Sentiment: Analyst sentiment and institutional demand are supportive. Wall Street analysts remain broadly optimistic, and 36 exchange-traded funds added AMAT shares on October 26, potentially providing incremental buying support. Is Applied Materials a Buy as Wall Street Analysts Look Optimistic?
• Neutral Sentiment: Investors are positioning ahead of earnings. Analysts expect a robust double-digit earnings increase in the upcoming fourth-quarter report, driven by AI-related chip demand. The results and forward guidance will be the next major catalyst. What You Need to Know Ahead of Applied Materials’ Earnings Release
• Negative Sentiment: Recent technical weakness and uncertainty temper the outlook. AMAT’s recent decline leaves it below key moving averages, and investors are assessing whether the company’s long-term growth profile still matches the investment thesis. The stock also faces potential sensitivity to supply bottlenecks, China exposure and a relatively high trailing P/E of 36.35. Is Applied Materials Still The Company You Bought?

Analysts Set New Price Targets

AMAT has been the subject of several recent research reports. Berenberg Bank increased their price objective on shares of Applied Materials from $575.00 to $675.00 and gave the stock a “buy” rating in a research report on Monday, August 17th. Erste Group Bank cut shares of Applied Materials from a “buy” rating to a “hold” rating in a research report on Wednesday, August 5th. Zacks Research downgraded Applied Materials from a “strong-buy” rating to a “hold” rating in a report on Thursday, October 15th. Mizuho cut their price objective on Applied Materials from $650.00 to $590.00 and set an “outperform” rating on the stock in a research report on Tuesday, August 25th. Finally, TD Cowen restated a “buy” rating and set a $700.00 price objective on shares of Applied Materials in a research note on Friday, August 14th. Thirty research analysts have rated the stock with a Buy rating and nine have assigned a Hold rating to the company’s stock. According to MarketBeat.com, Applied Materials presently has an average rating of “Moderate Buy” and a consensus target price of $632.70.

Applied Materials Price Performance

The company has a current ratio of 2.42, a quick ratio of 1.79 and a debt-to-equity ratio of 0.20. The stock has a market cap of $334.63 billion, a PE ratio of 36.35, a P/E/G ratio of 1.05 and a beta of 1.60. The company’s 50 day moving average is $461.27 and its 200-day moving average is $442.61.

Applied Materials (NASDAQ:AMAT) last posted its quarterly earnings data 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. The company had revenue of $9.12 billion during the quarter, compared to analysts’ expectations of $8.99 billion. Applied Materials had a net margin of 30.05% and a return on equity of 38.02%. The firm’s revenue for the quarter was up 24.8% on a year-over-year basis. During the same period in the prior year, the company posted $2.48 EPS. Applied Materials has set its Q4 2026 guidance at 3.820-4.220 EPS. As a group, sell-side analysts predict that Applied Materials, Inc. will post 12.79 earnings per share for the current year.

Applied Materials Dividend Announcement

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

Insider Buying and Selling at Applied Materials

In other Applied Materials news, CFO Brice Hill sold 7,500 shares of the firm’s 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 transaction, the chief financial officer directly owned 128,613 shares of the company’s stock, valued at $61,637,780.25. This trade represents a 5.51% decrease in their position. The sale was disclosed in a legal filing with the Securities & Exchange Commission, which is available at the SEC website. Also, CAO Adam Sanders sold 725 shares of the company’s stock in a transaction dated Friday, October 2nd. The shares were sold at an average price of $544.56, for a total transaction of $394,806.00. Following the completion of the sale, the chief accounting officer owned 3,181 shares in the company, valued at approximately $1,732,245.36. This trade represents a 18.56% decrease in their position. Additional details regarding this sale are available in the official SEC disclosure. The sale was made to cover tax withholding obligations related to the vesting of equity awards. Insiders have sold a total of 9,225 shares of company stock valued at $4,454,181 in the last three months. Corporate insiders own 0.30% of the company’s stock.

Institutional Trading of Applied Materials

Several institutional investors have recently added to or reduced their stakes in the business. Woodmont Investment Counsel LLC raised its stake in shares of Applied Materials by 11.5% in the third quarter. Woodmont Investment Counsel LLC now owns 1,740 shares of the manufacturing equipment provider’s stock valued at $890,000 after buying an additional 180 shares during the period. Traynor Capital Management Inc. lifted its position in shares of Applied Materials by 2.6% during the 3rd quarter. Traynor Capital Management Inc. now owns 6,618 shares of the manufacturing equipment provider’s stock valued at $3,384,000 after buying an additional 169 shares during the last quarter. Sumitomo Mitsui Trust Group Inc. grew its stake in shares of Applied Materials by 11.6% during the 3rd quarter. Sumitomo Mitsui Trust Group Inc. now owns 2,103,271 shares of the manufacturing equipment provider’s stock worth $1,075,571,000 after acquiring an additional 219,045 shares during the period. Mirae Asset Global Investments Co. Ltd. bought a new position in shares of Applied Materials during the 3rd quarter worth $504,242,000. Finally, ProShare Advisors LLC increased its holdings in Applied Materials by 5.4% in the 3rd quarter. ProShare Advisors LLC now owns 1,023,240 shares of the manufacturing equipment provider’s stock worth $523,264,000 after acquiring an additional 52,448 shares during the last quarter. Institutional investors own 80.56% of the company’s stock.

About Applied Materials

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.