About APPLIED MATERIALS INC
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.
AMAT operates in the Manufacturing | Electronic Equipment | headquartered in Wilmington, California | approximately 33,000 employees | led by CEO Gary E. Dickerson.
$148.6 billion 20.9x P/E 7.6x P/B 13.6x EV/EBITDA 33.0% ROE 8.0% rev. growth 1.0% yield
APPLIED MATERIALS INC earns a Buy rating from our quantitative model with a composite score of 72/100, ranking #49 among 7,333 U.S. stocks. The model sees a stock with an above-average factor profile — not without risks, but with enough quantitative support to warrant a constructive outlook.
The strongest dimension is value at 87/100, which places AMAT in the top 13 percent of all stocks on this measure. quality at 85/100 provides secondary support. Investors should note that investment efficiency scores a below-average 31/100, which tempers the overall profile.
Within the Manufacturing sector, AMAT ranks 27th out of 50 peers, placing it in the 46th percentile. At $148.6 billion, the company is a well-established large cap.
Quality Analysis
APPLIED MATERIALS INC's quality score of 85/100 places it among the top profitability performers in the market. The quality factor evaluates margins, return on equity, return on assets, and earnings consistency — the fundamental building blocks of a durable business.
Return on equity of 33.0% exceeds the sector median of -2.0%. Gross margins of 49.0% are competitive for the sector. Operating margins of 31.0% sit above the 3.0% sector average.
Net margins of 24.0% demonstrate that the company efficiently converts revenue into bottom-line profit.
Valuation Assessment
A value score of 87/100 puts AMAT in the top 13 percent of all stocks on cheapness — suggesting the market is significantly underpricing the company's fundamentals. Key valuation metrics include a P/E ratio of 20.9x, an EV/EBITDA of 13.6x, a price-to-book of 7.6x, a price-to-sales of 5.1x. Deep value scores like this historically correlate with above-average forward returns, though they can also reflect legitimate concerns about business quality that the value factor does not capture.
Momentum & Timing
APPLIED MATERIALS INC's momentum score of 85/100 places it among the strongest trending stocks in the market. The stock has been outperforming roughly 85 percent of all other companies over the relevant measurement window. The academic literature, starting with Jegadeesh and Titman's seminal 1993 research, demonstrates that stocks with this kind of relative strength tend to continue outperforming for three to twelve months.
Revenue growth of 8.0% provides a moderate fundamental underpinning.
Our entry timing model currently signals Neutral, which warrants caution despite the price trend.
Risk Factors
No investment comes without risks, and honest analysis requires flagging them clearly:
- Leverage risk. A debt-to-equity ratio of 32.00 indicates significant leverage. In a rising rate environment or economic downturn, high debt loads can amplify losses and strain cash flow. Investors should monitor the company's ability to service its obligations.
- Model limitations. Quantitative models measure what is measurable — financial ratios, price trends, leverage — but cannot capture qualitative factors like management quality, competitive positioning, or pending litigation. This analysis should be supplemented with fundamental due diligence.
- Market regime risk. Factor-based strategies perform differently across market regimes. The current factor exposures that support APPLIED MATERIALS INC's rating may become headwinds if the macro environment shifts — for example, if interest rates move sharply or if sector rotation accelerates.
Bottom Line
APPLIED MATERIALS INC earns a Buy rating with a composite score of 72/100 and 4 out of 5 stars, ranking #49 among 7,333 stocks. The factor profile is constructive — not without blemishes, but with enough quantitative support to position AMAT above the majority of the market.
Explore the full AMAT analysis page for interactive factor breakdowns, or view the complete stock rankings.
Analysis is for informational purposes only and does not constitute investment advice. Always conduct your own research before making investment decisions.
