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Relative valuation derived from Technology sector median benchmarks. Model weights: EV/EBITDA (40%), P/B (35%), P/S (25%). Multiples adjusted for extreme outliers and non-recurring volatility.
Auditing capital efficiency...
Quality Profile Audit
Score: 50GRADE C+
Composite assessment of profitability, capital efficiency, and financial strength. Top-tier entities demonstrate sustainable cash flow generation.
Return on Equity
Profit generated per dollar of shareholder equity
32.8%
Sector: -1.4%
Dividend Analysis audit
GROWTH
0.90%
Trailing Yield
$0.90
Per $100 Invested
Modest dividend — capital prioritized for reinvestment.
Est. Payout Ratio
39%SAFE
Analyst Projections
Analyst Consensus
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Based on our 6-factor quantitative model, APPLIED MATERIALS INC /DE (AMAT) receives a "Hold" rating with a composite score of 50.3/100, ranked #659 out of 4446 stocks. Key factor scores: Quality 50/100, Value 41/100, Momentum 73/100. This is quantitative analysis only — not investment advice.
APPLIED MATERIALS INC /DE (AMAT) Stock Analysis — April 2026 Rating, Price, and Forecast
Company Overview — What Does APPLIED MATERIALS INC /DE Do?
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. APPLIED MATERIALS INC /DE (AMAT) is classified as a mega-cap stock in the Technology sector, specifically within the Electronic Equipment industry. The company is led by CEO Gary E. Dickerson and employs approximately 33,000 people, headquartered in Wilmington, California. With a market capitalization of $280.8B, AMAT is one of the largest companies in the Technology sector.
As of April 2026, APPLIED MATERIALS INC /DE receives a Hold rating with a composite score of 50.3/100 and 3 out of 5 stars from the Blank Capital Research quantitative model.AMAT ranks #659 out of 4,446 stocks in our coverage universe. Within the Technology sector, APPLIED MATERIALS INC /DE ranks #55 of 584 stocks, placing it in the top 10% of its Technology peers. The rating is generated by a multi-factor model that weighs quality (30%), momentum (25%), value (15%), investment (10%), stability (10%), and short interest (10%).
AMAT Stock Price and 52-Week Range
APPLIED MATERIALS INC /DE (AMAT) currently trades at $401.51. The stock gained $3.70 (0.9%) in the most recent trading session. The 52-week high for AMAT is $395.95, which means the stock is currently trading 1.4% from its annual peak. The 52-week low is $123.74, putting the stock 224.5% above its annual trough. Recent trading volume was 6.4M shares, reflecting moderate market activity.
Is AMAT Overvalued or Undervalued? — Valuation Analysis
APPLIED MATERIALS INC /DE (AMAT) carries a value factor score of 41/100 in the Blank Capital model, indicating fair valuation relative to historical norms. The trailing price-to-earnings ratio is 42.95x, compared to the Technology sector average of 45.27x — a discount of 5%. The price-to-book ratio stands at 14.10x, versus the sector average of 3.16x. The price-to-sales ratio is 10.71x, compared to 1.06x for the average Technology stock. On an enterprise value basis, AMAT trades at 34.57x EV/EBITDA, versus 12.79x for the sector.
Overall, AMAT's valuation appears roughly in line with sector benchmarks, suggesting the market is pricing the stock fairly given its current fundamentals and growth trajectory. Neither deep value nor significantly overpriced, the stock occupies a middle ground on valuation.
APPLIED MATERIALS INC /DE (AMAT) earns a quality factor score of 50/100, indicating solid business quality with consistent operational execution. The return on equity (ROE) is 32.8%, compared to the Technology sector average of -1.4%, which demonstrates strong shareholder value creation. Return on assets (ROA) comes in at 18.9% versus the sector average of -1.0%.
On a margin basis, APPLIED MATERIALS INC /DE reports gross margins of 48.9%, compared to 50.9% for the sector. The operating margin is 29.4% (sector: -0.5%). Net profit margin stands at 25.0%, versus -1.5% for the average Technology stock. Revenue growth is running at 3.5% on a trailing basis, compared to 14.2% for the sector. The overall profitability profile is adequate, though there may be room for margin expansion.
AMAT Debt, Balance Sheet, and Financial Health
APPLIED MATERIALS INC /DE has a debt-to-equity ratio of 73.0%, compared to the Technology sector average of 43.0%. Leverage is within a manageable range for the industry, though investors should monitor debt trends over time. The current ratio is 2.71x, indicating strong short-term liquidity. Total debt on the balance sheet is $6.55B. Cash and equivalents stand at $7.24B.
AMAT has a beta of 1.65, meaning it is more volatile than the broader market — a $10,000 investment in AMAT would be expected to move 65.0% more than the S&P 500 on any given day. The stability factor score for APPLIED MATERIALS INC /DE is 48/100, reflecting average volatility within the normal range for its sector.
APPLIED MATERIALS INC /DE Revenue and Earnings History — Quarterly Trend
In TTM 2026, APPLIED MATERIALS INC /DE reported revenue of $28.58B and earnings per share (EPS) of $2.55. Net income for the quarter was $7.13B. Gross margin was 48.9%. Operating income came in at $8.41B.
In Q1 2026, APPLIED MATERIALS INC /DE reported revenue of $7.01B and earnings per share (EPS) of $2.55. Net income for the quarter was $2.03B. Gross margin was 49.0%. Revenue grew -2.1% year-over-year compared to Q1 2025. Operating income came in at $1.83B.
In FY 2025, APPLIED MATERIALS INC /DE reported revenue of $28.37B and earnings per share (EPS) of $8.71. Net income for the quarter was $7.00B. Gross margin was 48.7%. Revenue grew 4.4% year-over-year compared to FY 2024. Operating income came in at $8.29B.
In Q3 2025, APPLIED MATERIALS INC /DE reported revenue of $7.30B and earnings per share (EPS) of $2.23. Net income for the quarter was $1.78B. Gross margin was 48.8%. Revenue grew 7.7% year-over-year compared to Q3 2024. Operating income came in at $2.23B.
Over the past 8 quarters, APPLIED MATERIALS INC /DE has demonstrated a growth trajectory, with revenue expanding from $6.78B to $28.58B. Investors analyzing AMAT stock should weigh these quarterly trends alongside the valuation and quality metrics discussed above.
AMAT Dividend Yield and Income Analysis
APPLIED MATERIALS INC /DE (AMAT) currently pays a dividend yield of 0.9%. At this yield, a $10,000 investment in AMAT stock would generate approximately $$90.00 in annual dividend income. With a net margin of 25.0%, the dividend appears well-covered by earnings, suggesting sustainable payouts going forward.
AMAT Momentum and Technical Analysis Profile
APPLIED MATERIALS INC /DE (AMAT) has a momentum factor score of 73/100, indicating strong price momentum with the stock outperforming the majority of the market over recent periods. Stocks with high momentum scores have historically tended to continue their outperformance in the near term. The investment factor score is 32/100, which measures capital allocation efficiency and asset growth patterns. The short interest score of 30/100 signals elevated short interest, which can indicate bearish sentiment among institutional investors.
AMAT vs Competitors — Technology Sector Ranking and Peer Comparison
Within the Technology sector, APPLIED MATERIALS INC /DE (AMAT) ranks #55 out of 584 stocks based on the Blank Capital composite score. This places AMAT in the top decile of all Technology stocks in our coverage universe. Key competitors and sector peers include IHS Holding Ltd (IHS) with a score of 55.0/100, VERISIGN INC/CA (VRSN) with a score of 56.0/100, ESCO TECHNOLOGIES INC (ESE) with a score of 51.7/100, CareCloud, Inc. (CCLD) with a score of 46.9/100, and MMTec, Inc. (MTC) with a score of 47.4/100.
Comparing AMAT against the S&P 500 benchmark is also instructive for understanding relative performance. Investors can view the full AMAT vs S&P 500 (SPY) comparison to assess how APPLIED MATERIALS INC /DE stacks up against the broader market across all factor dimensions.
AMAT Next Earnings Date
No upcoming earnings date has been announced for APPLIED MATERIALS INC /DE (AMAT) at this time. Check the earnings calendar for the latest scheduling updates across all stocks in our coverage universe.
Should You Buy AMAT? — Investment Thesis Summary
APPLIED MATERIALS INC /DE presents a balanced picture with arguments on both sides. Price momentum is positive at 73/100, suggesting the trend favors buyers.
In summary, APPLIED MATERIALS INC /DE (AMAT) earns a Hold rating with a composite score of 50.3/100 as of April 2026. The rating is derived from the Blank Capital Research methodology, which combines six factor dimensions into a single quantitative ranking. Investors should consider these quantitative signals alongside their own fundamental research, risk tolerance, and investment time horizon before making buy or sell decisions on AMAT stock.
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Institutional Research Dossier
APPLIED MATERIALS INC /DE (AMAT) Deep Dive Analysis
Published on March 24, 2026
Action RatingHold
Sections
Executive Summary
We maintain a Hold rating on Applied Materials (AMAT). While the company operates in a critical industry with strong secular tailwinds from increasing semiconductor complexity and demand, its valuation appears stretched relative to its growth prospects and historical performance. The company's high P/E and EV/EBITDA multiples compared to the sector suggest that much of the future growth is already priced into the stock.
The semiconductor equipment industry is cyclical and capital-intensive, and AMAT's performance is highly correlated with the capital expenditure cycles of its customers. While AMAT has demonstrated strong profitability and returns, the current valuation leaves little margin for error, and any slowdown in semiconductor demand or increased competition could negatively impact the stock price. Therefore, we believe a Hold rating is warranted until a more attractive entry point presents itself.
Business Strategy & Overview
Applied Materials operates in the semiconductor equipment industry, providing manufacturing equipment, services, and software to semiconductor, display, and related industries. The company's revenue is primarily derived from the sale of equipment used in the fabrication of semiconductor chips, as well as services that optimize equipment and fab performance. AMAT's strategic positioning revolves around providing a comprehensive suite of solutions across various stages of the semiconductor manufacturing process, including deposition, etching, metrology, and inspection.
The company operates through three segments: Semiconductor Systems, Applied Global Services, and Display and Adjacent Markets. The Semiconductor Systems segment is the largest, focusing on equipment sales for chip fabrication. The Applied Global Services segment provides services to optimize equipment performance, offering recurring revenue streams. The Display and Adjacent Markets segment caters to the display industry, providing equipment for manufacturing LCD and OLED displays. This diversification allows AMAT to capture value across different parts of the technology ecosystem.
AMAT's business strategy is heavily influenced by the capital expenditure cycles of its customers, which include major semiconductor manufacturers. These cycles are driven by demand for electronic devices, technological advancements, and capacity expansions. AMAT invests heavily in research and development to stay ahead of technological trends and maintain its competitive position. The company's product pipeline focuses on developing advanced manufacturing equipment that enables the production of smaller, faster, and more energy-efficient chips.
The company's geographic footprint is global, with operations in the United States, China, Korea, Taiwan, Japan, Southeast Asia, and Europe. This global presence allows AMAT to serve its customers wherever they are located and to capitalize on growth opportunities in different regions. The semiconductor industry is highly competitive, with several major players vying for market share. AMAT competes with companies like ASML, Lam Research, and Tokyo Electron. The company's ability to innovate and provide differentiated solutions is crucial for maintaining its competitive edge.
Execution Benchmarks audit
Revenue Growth
YOY expansion rate
3.5%
Sector: 14.2%
-76% VS SCTR
Economic Moat Analysis
Applied Materials possesses a narrow economic moat, primarily derived from intangible assets and switching costs. The company's extensive portfolio of patents and proprietary technologies in semiconductor manufacturing equipment creates a barrier to entry for new competitors. Developing and validating new equipment for advanced chip fabrication requires significant investment in research and development, as well as deep expertise in materials science and engineering. This makes it difficult for new entrants to replicate AMAT's capabilities.
Switching costs also contribute to AMAT's moat. Semiconductor manufacturers invest heavily in integrating AMAT's equipment into their production lines. Once integrated, switching to a different vendor's equipment can be costly and time-consuming, requiring significant retraining and process adjustments. This creates a degree of customer stickiness, as manufacturers are often reluctant to switch vendors unless there is a compelling reason to do so.
However, the moat is not wide due to the presence of strong competitors like ASML and Lam Research, who also possess significant technological expertise and established customer relationships. The semiconductor equipment industry is characterized by rapid technological change, and companies must continuously innovate to maintain their competitive position. Failure to do so can quickly erode their market share.
Furthermore, the cyclical nature of the semiconductor industry can impact AMAT's moat. During periods of economic downturn, semiconductor manufacturers may reduce their capital expenditures, leading to lower demand for AMAT's equipment. This can put pressure on the company's profitability and make it more difficult to invest in research and development. While AMAT's installed base provides a recurring revenue stream through its Applied Global Services segment, this is not enough to fully offset the impact of cyclical downturns.
The company's moat is also dependent on its ability to maintain its technological leadership. If competitors develop superior equipment or processes, AMAT could lose market share and its moat could weaken. Therefore, AMAT must continue to invest in research and development and stay ahead of technological trends to maintain its competitive advantage.
Financial Health & Profitability
Applied Materials has demonstrated strong financial performance in recent years, with consistent revenue growth and high profitability. However, the company's revenue growth of 3.5% (TTM) lags behind the sector average of 14.0%, indicating potential underperformance relative to its peers. The company's gross margin of 48.9% is slightly below the sector average of 51.2%, while its operating margin of 29.4% and net margin of 25.0% significantly exceed the sector averages of -0.5% and -1.5%, respectively. This suggests that AMAT is more efficient at managing its expenses and generating profits than its peers.
The company's return on equity (ROE) of 32.8% is exceptionally high compared to the sector average of -1.5%, indicating strong profitability and efficient use of equity. AMAT's balance sheet is relatively healthy, with total cash of $7.24 billion and total debt of $6.55 billion. The current ratio of 2.71 indicates that the company has ample liquidity to meet its short-term obligations. However, the debt-to-equity ratio of 73.00 is higher than the sector average of 43.00, suggesting a higher level of leverage.
Analyzing the quarterly financial history reveals consistent revenue and net income generation. The company's gross margin has remained relatively stable, fluctuating between 46.3% and 49.1% over the past few years. The operating margin has also been consistently high, ranging from 26.1% to 30.6%. This demonstrates AMAT's ability to maintain its profitability despite fluctuations in revenue.
The company's free cash flow (FCF) generation is strong, with a TTM FCF of $5.19 billion. This provides AMAT with the financial flexibility to invest in research and development, make acquisitions, and return capital to shareholders through dividends and share repurchases. However, the absence of quarterly FCF data limits a more granular analysis of its cash flow trends.
Overall, Applied Materials exhibits strong financial health, characterized by high profitability, efficient operations, and solid cash flow generation. However, the company's revenue growth lags behind the sector average, and its debt-to-equity ratio is higher than its peers. These factors warrant careful monitoring.
Valuation Assessment
Applied Materials' valuation appears stretched based on several key metrics. The company's P/E ratio of 140.0x is significantly higher than the sector average of 45.3x, suggesting that the stock is overvalued relative to its earnings. Similarly, the EV/EBITDA ratio of 36.2x is much higher than the sector average of 13.0x, further indicating that the stock is expensive relative to its earnings before interest, taxes, depreciation, and amortization.
While AMAT has demonstrated strong profitability and returns, the current valuation implies high expectations for future growth. The company's revenue growth of 3.5% (TTM) does not justify such a high valuation, as it lags behind the sector average of 14.0%. This suggests that much of the future growth is already priced into the stock, leaving little margin for error.
A discounted cash flow (DCF) analysis would be necessary to determine the intrinsic value of the stock. However, based on the available data, it appears that the stock is trading at a premium to its fair value. The high P/E and EV/EBITDA multiples suggest that investors are willing to pay a premium for AMAT's earnings and cash flows, likely due to its strong market position and growth prospects in the semiconductor industry.
However, the cyclical nature of the semiconductor industry and the potential for increased competition could negatively impact AMAT's future performance. If the company fails to meet its growth expectations, the stock price could decline significantly. Therefore, investors should exercise caution when considering an investment in AMAT at its current valuation.
Compared to its historical valuation, AMAT's current multiples are also elevated. The company's P/E ratio has historically traded at a lower level, reflecting the cyclical nature of its business. The current high valuation suggests that investors are more optimistic about AMAT's future prospects than they have been in the past. However, this optimism may not be justified, given the challenges and uncertainties facing the semiconductor industry.
Risk & Uncertainty
Applied Materials faces several risks and uncertainties that could impact its future performance. One of the primary risks is the cyclical nature of the semiconductor industry. Demand for semiconductor equipment is highly correlated with the capital expenditure cycles of semiconductor manufacturers, which are in turn driven by demand for electronic devices. During periods of economic downturn, semiconductor manufacturers may reduce their capital expenditures, leading to lower demand for AMAT's equipment. This could negatively impact the company's revenue and profitability.
Another risk is increased competition. The semiconductor equipment industry is highly competitive, with several major players vying for market share. AMAT competes with companies like ASML, Lam Research, and Tokyo Electron. These companies are constantly innovating and developing new equipment, which could erode AMAT's market share. To maintain its competitive position, AMAT must continue to invest in research and development and stay ahead of technological trends.
Geopolitical risks also pose a threat to AMAT's business. The company operates in several countries, including China, which is a major market for semiconductor equipment. Trade tensions between the United States and China could disrupt AMAT's supply chain and negatively impact its sales in China. Furthermore, export restrictions imposed by the United States government could limit AMAT's ability to sell certain equipment to Chinese customers.
Technological obsolescence is another risk. The semiconductor industry is characterized by rapid technological change. New technologies and manufacturing processes are constantly being developed, which could render AMAT's equipment obsolete. To mitigate this risk, AMAT must continuously invest in research and development and adapt to changing technological trends.
Customer concentration is also a concern. AMAT's revenue is concentrated among a small number of large semiconductor manufacturers. If one or more of these customers were to reduce their capital expenditures or switch to a different vendor, it could negatively impact AMAT's revenue. To mitigate this risk, AMAT must diversify its customer base and develop relationships with a wider range of semiconductor manufacturers.
Bulls Say / Bears Say
The Bull Case
BULL VIEWApplied Materials is well-positioned to benefit from the increasing complexity of semiconductor manufacturing, driving demand for its advanced equipment and services.
BULL VIEWThe company's strong free cash flow generation allows for continued investment in R&D and shareholder returns, supporting long-term growth and value creation.
BULL VIEWApplied Materials' Applied Global Services segment provides a stable, recurring revenue stream, mitigating the impact of cyclical downturns in the semiconductor industry.
The Bear Case
BEAR VIEWApplied Materials' high valuation multiples suggest that the stock is overvalued, leaving little room for error if growth slows or competition intensifies.
BEAR VIEWThe cyclical nature of the semiconductor industry poses a significant risk to Applied Materials' revenue and profitability, particularly during economic downturns.
BEAR VIEWIncreased geopolitical tensions and trade restrictions could disrupt Applied Materials' supply chain and negatively impact its sales in key markets like China.
About the Author
Marques Blank
Founder & Chief Investment Officer, Blank Capital
Marques brings 15 years of institutional finance and investing experience, having overseen financial planning for a $1.6B defense business unit. He developed the proprietary 6-factor quantitative model used to score AMAT and 4,400+ other equities.
APPLIED MATERIALS INC /DE exhibits a 355% valuation premium relative to institutional benchmarks. This represents a potential valuation overextension based on current multiples.
Return on Assets
Efficiency of asset utilization
18.9%
Sector: -1.0%
Gross Margin
Pricing power and cost efficiency
48.9%
Sector: 50.9%
Operating Margin
Core business profitability
29.4%
Sector: -0.5%
Net Margin
Bottom-line profitability
25.0%
Sector: -1.5%
Factor Methodology
The Quality factor evaluates the persistence and magnitude of cash flows. Companies with scores >70 exhibit superior competitive moats and financial resilience through economic cycles.
Sector Avg Yield0.00%
Yield Delta—
Income Projection audit
A $10,000 investment would generate approximately $90 annually in dividends at the current trailing rate.
