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1. Company Snapshot

1.a. Company Description

Applied Materials, Inc.provides manufacturing equipment, services, and software to the semiconductor, display, and related industries.It operates through three segments: Semiconductor Systems, Applied Global Services, and Display and Adjacent Markets.


The Semiconductor Systems segment develops, manufactures, and sells various manufacturing equipment that is used to fabricate semiconductor chips or integrated circuits.This segment also offers various technologies, including epitaxy, ion implantation, oxidation/nitridation, rapid thermal processing, physical vapor deposition, chemical vapor deposition, chemical mechanical planarization, electrochemical deposition, atomic layer deposition, etching, and selective deposition and removal, as well as metrology and inspection tools.The Applied Global Services segment provides integrated solutions to optimize equipment and fab performance and productivity comprising spares, upgrades, services, remanufactured earlier generation equipment, and factory automation software for semiconductor, display, and other products.


The Display and Adjacent Markets segment offers products for manufacturing liquid crystal displays; organic light-emitting diodes; and other display technologies for TVs, monitors, laptops, personal computers, electronic tablets, smart phones, and other consumer-oriented devices.The company operates in the United States, China, Korea, Taiwan, Japan, Southeast Asia, and Europe.Applied Materials, Inc.


was incorporated in 1967 and is headquartered in Santa Clara, California.

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1.b. Last Insights on AMAT

Breaking News: Applied Materials Inc has seen increased investment from several major firms. B Metzler seel Sohn Co AG raised its holdings by 19.2% to 168749 shares. First Trust Advisors LP also grew its position by 4.9% to 3101772 shares. Additionally, the company has been recognized as a key player in the semiconductor industry, with its stock being added to the S&P 100. Analysts view 2026 as a promising year for semiconductor stocks. No recent earnings release data is available. A buy recommendation was given by no one. A hold recommendation was given by no one. A sell recommendation was given by no one.

1.c. Company Highlights

2. Applied Materials' Q1 2026 Earnings: Strong Revenue and Margin Performance

Applied Materials delivered a robust Q1 2026, with revenues and earnings per share (EPS) exceeding expectations. EPS came in at $2.54, beating the estimated $2.19. The company's strong financial performance was driven by healthy demand across AI, foundry-logic, and memory, with revenue growth supported by node migrations and new 3D scaling approaches. Gross margin reflected a favorable product and customer mix, as well as continued improvements in productivity and cost.

Publication Date: Feb -13

📋 Highlights
  • Strong Q1 Performance:: Revenue, margins, and cash flow delivered solid results driven by AI, foundry-logic, and memory demand.
  • AI-Driven Demand:: Robust AI investments sustained WFE strength, with growth in advanced packaging and improving memory (DRAM/NAND) trends.
  • Advanced Packaging Growth:: Accelerated adoption of heterogeneous integration and hybrid bonding, positioning it as a key growth vector.
  • Supply Chain Resilience:: Capacity expansion, supplier diversification, and lead time improvements to address constraints and trade regulations.
  • Shareholder Returns & R&D Focus:: Capital returned via buybacks/dividends while investing in R&D and capacity for long-term growth and technology leadership.

Segment Performance

The company's foundry-logic segment remained healthy, with strength at leading nodes, while memory is improving, led by DRAM and HBM-related investments. Regionally, the company saw continued momentum in the U.S. and Taiwan, with activity also picking up in Korea. As Gary Dickerson noted, "AI demand remains robust and broad-based, supporting sustained WFE strength." Advanced packaging is also emerging as a strong growth vector, driven by heterogeneous integration and AI.

Operational Highlights

Applied Materials continued to expand capacity in critical product lines and invest in supply resiliency, with lead times improving as the company qualifies additional suppliers and streamlines its operations. The company has made progress diversifying suppliers, increasing dual-sourcing, and localizing critical components, which should improve resiliency and reduce lead times.

Outlook and Valuation

With a book-to-bill around unity and backlog remaining elevated, the company is well-positioned for sustained growth. Analysts estimate revenue growth of 17.3% next year. At current levels, the stock trades at a P/E Ratio of 33.22, P/S Ratio of 9.24, and EV/EBITDA of 28.28, indicating a premium valuation. However, with an ROE of 38.9% and ROIC of 21.91%, the company's strong profitability metrics suggest that the premium may be justified.

Return to Shareholders

The company continues to return capital to shareholders through repurchases and dividends, with a Dividend Yield of 0.54%. The company's strong free cash flow generation, with a Free Cash Flow Yield of 2.19%, provides further support for shareholder returns.

3. NewsRoom

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Applied Materials, Inc. (AMAT) Presents at 2026 Cantor Global Technology & Industrial Growth Conference Transcript

Mar -10

Source: seekingalpha.com

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Applied Materials Q1 2026 Free Cash Flow Hit $1.04 Billion, So Why Is the Stock Sliding

Mar -10

Source: 247wallst.com

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Applied Materials and Micron Partner To Advance U.S. Innovation in Next-Generation AI Memory Solutions

Mar -10

Source: globenewswire.com

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Applied Materials, Inc. $AMAT Shares Sold by Fort Sheridan Advisors LLC

Mar -09

Source: defenseworld.net

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Dundas Partners LLP Acquires 165,912 Shares of Applied Materials, Inc. $AMAT

Mar -09

Source: defenseworld.net

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B. Metzler seel. Sohn & Co. AG Raises Stock Holdings in Applied Materials, Inc. $AMAT

Mar -08

Source: defenseworld.net

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First Trust Advisors LP Increases Position in Applied Materials, Inc. $AMAT

Mar -07

Source: defenseworld.net

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MU, LRCX, AMAT, GEV All Added to the S&P 100 As AI Stocks Gain Influence

Mar -06

Source: 247wallst.com

4. Business Breakdown

4.a. Revenues by Country

4.b. Revenues by Segment

5. Expected revenues mid-term growth (9.74%)

6. Segments

Semiconductor Systems

Expected Growth: 10.2%

Strong demand for Applied Materials' semiconductor systems, driven by increasing adoption of artificial intelligence, 5G, and Internet of Things, will fuel growth.

Applied Global Services

Expected Growth: 8.2%

Applied Materials' global services and maintenance growth is driven by rising demand for semiconductor devices, increasing complexity in chip design, and growing need for yield improvement, leading to increased adoption of its comprehensive services and support offerings.

Display and Adjacent Markets

Expected Growth: 10.2%

Increasing demand for advanced logic and memory chips drives growth in Display and Adjacent Markets for Applied Materials, Inc. This is fueled by the rising adoption of 5G-enabled devices, IoT, and AI applications, which is expected to continue in the forecast period.

Corporate and Other

Expected Growth: 10.4%

Applied Materials' corporate and other operations are driven by increasing demand for semiconductor materials and services, as well as the company's focus on innovation and cost reduction. The growth is also fueled by the rising adoption of artificial intelligence, 5G, and Internet of Things (IoT) technologies.

7. Detailed Products

Etch Systems

Etch systems are used to create high-aspect-ratio structures and patterns on silicon wafers, enabling the production of advanced semiconductors.

Deposition Systems

Deposition systems are used to deposit thin films of material onto silicon wafers, enabling the production of advanced semiconductors.

Metrology and Inspection Systems

Metrology and inspection systems are used to measure and inspect the properties of silicon wafers and semiconductor devices.

CMP Systems

Chemical mechanical planarization (CMP) systems are used to planarize silicon wafers, enabling the production of advanced semiconductors.

Wafer Cleaning Systems

Wafer cleaning systems are used to clean and prepare silicon wafers for further processing.

Ion Implantation Systems

Ion implantation systems are used to introduce dopants into silicon wafers, enabling the production of advanced semiconductors.

Physical Vapor Deposition (PVD) Systems

PVD systems are used to deposit thin films of material onto silicon wafers, enabling the production of advanced semiconductors.

Chemical Vapor Deposition (CVD) Systems

CVD systems are used to deposit thin films of material onto silicon wafers, enabling the production of advanced semiconductors.

Display and Adjacent Markets

Display and adjacent markets solutions are used in the production of displays, such as OLED and LCD displays.

8. Applied Materials, Inc.'s Porter Forces

Forces Ranking

Threat Of Substitutes

Applied Materials, Inc. faces moderate threat from substitutes, as customers have limited alternatives for its specialized semiconductor manufacturing equipment.

Bargaining Power Of Customers

Applied Materials, Inc. has a diverse customer base, which reduces the bargaining power of individual customers, giving the company an upper hand in negotiations.

Bargaining Power Of Suppliers

Applied Materials, Inc. relies on a few key suppliers for critical components, giving them some bargaining power, but the company's large scale and diversified supply chain mitigate this risk.

Threat Of New Entrants

The high barriers to entry in the semiconductor manufacturing equipment industry, including significant capital expenditures and technological expertise, make it difficult for new entrants to challenge Applied Materials, Inc.'s market position.

Intensity Of Rivalry

The semiconductor manufacturing equipment industry is highly competitive, with several established players competing for market share, leading to a high intensity of rivalry.

9. SWOT Analysis

Strength

Weaknesses

Opportunities

Threats

10. Capital Structure

10.a. Balance Sheet

10.b. Weighted Average Cost of capital

Value
Debt Weight 25.38%
Debt Cost 4.82%
Equity Weight 74.62%
Equity Cost 11.85%
WACC 10.06%
Leverage 34.01%

11. Quality Control: Applied Materials, Inc. passed 9 out of 9 key points

12.a Historical Valuation

12.b Price/Earnings Ratio

12.c Margin Valuation

12.d Peers Valuation

Peers Group Analysis

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KLA

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Value: 0.8

Growth: 8.3

Quality: 7.9

Yield: 2.0

Momentum: 9.5

Volatility: 5.0

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Broadcom

A-Score: 5.5/10

Value: 0.0

Growth: 8.3

Quality: 8.2

Yield: 3.0

Momentum: 10.0

Volatility: 3.7

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Lam Research

A-Score: 5.5/10

Value: 0.8

Growth: 8.1

Quality: 8.3

Yield: 2.0

Momentum: 9.5

Volatility: 4.3

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Applied Materials

A-Score: 5.3/10

Value: 1.6

Growth: 7.9

Quality: 8.1

Yield: 1.0

Momentum: 8.5

Volatility: 5.0

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Texas Instruments

A-Score: 4.5/10

Value: 1.0

Growth: 3.6

Quality: 7.1

Yield: 6.0

Momentum: 3.0

Volatility: 6.3

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Microchip Technology

A-Score: 3.3/10

Value: 2.7

Growth: 1.9

Quality: 3.7

Yield: 5.0

Momentum: 2.5

Volatility: 4.0

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Peers Metrics

12.e Scoring Insights

12.f DCF BETA

Parameters

Short Term Growth

Short term Time

Long-Term Growth

WACC

Target Price

345.88$

Current Price

345.88$

Potential

-0.00%

Expected Cash-Flows