Applied Materials, Inc. (AMAT) | Investment Case

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 shares declined on April 28 2026 amid concerns over data center spending and growth expectations affecting AI linked semiconductor stocks. The company has not released recent earnings data. Investors may consider the iShares Semiconductor ETF for broad exposure to the sector. Analysts have not provided recent recommendations on AMAT. Some analysts view the sector with caution due to spending and growth concerns. Applied Materials position in the semiconductor industry remains significant.

1.c. Company Highlights

Last Price	394.49
Change Percentage	3.11%
Open	385.54
Previous Close	382.59
Market Cap ( Millions)	313071
Volume	5115001
Year High	420.5
Year Low	151.51
M A 50	369.06
M A 200	268.37

FCF Yield	1.98%
Dividend Yield	0.47%
ROE	38.90%
Debt / Equity	33.11%
Net Debt / EBIDTA	-0.28%
Price To Book	14.4
Price Earnings Ratio	39.91
Price To FCF	50.54
Price To sales	11.1
EV / EBITDA	31.67

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

Applied Materials Inc (AMAT) Shares Surge 3.1% -- What GF Score of 87 Tells Investors

Apr -30

Source: gurufocus.com

The Valuation Truth Behind Applied Materials Stock At $380

Apr -30

Source: forbes.com

Exencial Wealth Advisors LLC Sells 4,716 Shares of Applied Materials, Inc. $AMAT

Apr -29

Source: defenseworld.net

What Is Going On With Applied Materials Stock On Tuesday?

Apr -28

Source: benzinga.com

Should You Invest in the iShares Semiconductor ETF (SOXX)?

Apr -28

Source: zacks.com

Applied Materials (AMAT) Stock Dips While Market Gains: Key Facts

Apr -27

Source: zacks.com

Metal, Chips, & Cash: Q1 ‘26 Additions to VictoryShares GFLW

Apr -27

Source: etftrends.com

Concurrent Investment Advisors LLC Raises Holdings in Applied Materials, Inc. $AMAT

Apr -27

Source: defenseworld.net

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

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

Strong Liquidity

Low Debt

Strong Interest Coverage

Healthy Cash Flow

Operating Efficiency

Strong Return On Equity

Consistent Revenue Growth

Consistent Operating Cash Flow Growth

Margin Improvement

12.a Historical Valuation

12.b Price/Earnings Ratio

12.c Margin Valuation

12.d Peers Valuation

Peers Group Analysis

KLA

A-Score: 5.6/10

Value: 0.8

Growth: 8.3

Quality: 7.9

Yield: 2.0

Momentum: 9.5

Volatility: 5.0

1-Year Total Return ->

Broadcom

A-Score: 5.5/10

Value: 0.0

Growth: 8.3

Quality: 8.2

Yield: 3.0

Momentum: 10.0

Volatility: 3.7

1-Year Total Return ->

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

1-Year Total Return ->

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

1-Year Total Return ->

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

1-Year Total Return ->

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

1-Year Total Return ->

Peers Metrics

12.e Scoring ^Insights

12.f DCF ^BETA

Parameters

Short Term Growth

21.69%

Short term Time

10.0

Long-Term Growth

2.00%

WACC

10.06%

Applied Materials, Inc. - US0382221051

1. Company Snapshot

1.a. Company Description

1.b. Last Insights on AMAT

1.c. Company Highlights

Better Quality

Higher Growth

Expensive

Earnings Beats

Revenues Beats

Strong Momentum

Stable Momentum

Fairly Valued

Average Yield

Weak Momentum

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

Segment Performance

Operational Highlights

Outlook and Valuation

Return to Shareholders

3. NewsRoom

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%

Applied Global Services

Expected Growth: 8.2%

Display and Adjacent Markets

Expected Growth: 10.2%

Corporate and Other

Expected Growth: 10.4%

7. Detailed Products

Etch Systems

Deposition Systems

Metrology and Inspection Systems

CMP Systems

Wafer Cleaning Systems

Ion Implantation Systems

Physical Vapor Deposition (PVD) Systems

Chemical Vapor Deposition (CVD) Systems

Display and Adjacent Markets

8. Applied Materials, Inc.'s Porter Forces

Forces Ranking

Threat Of Substitutes

Bargaining Power Of Customers

Bargaining Power Of Suppliers

Threat Of New Entrants

Intensity Of Rivalry

9. SWOT Analysis

Strength

Weaknesses

Opportunities

Threats

10. Capital Structure

10.a. Balance Sheet

10.b. Weighted Average Cost of capital

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

Peers Metrics

12.e Scoring Insights

12.f DCF BETA

Parameters

Short Term Growth

Short term Time

Long-Term Growth

WACC

Target Price

394.49$

Current Price

394.49$

Potential

-0.00%

Expected Cash-Flows

12.e Scoring ^Insights

12.f DCF ^BETA