AMAT Price & AI Analysis — Applied Materials Inc | HeyTheo
Market Cap
446.8403B
Mega Cap
P/E Ratio
52.89
Fwd: 35.09
EPS (TTM)
$10.64
Div. Yield
0.34%
Theo Outlook
Applied Materials (AMAT) presents a bullish thesis with a $420.5B market cap, trailing P/E of 49.73, TTM EPS of $10.65, and 11.4% YoY quarterly revenue growth to $29.0B, reflecting strong positioning in semiconductor equipment amid AI-driven chip demand. The forward P/E of 33.56 suggests valuation compression potential as earnings scale. High operating margins of 31.9% and ROE of 39.7% underscore efficient capital deployment in a high-growth sector.
Key catalysts include sustained semiconductor capex expansion, new product launches in deposition and etch technologies, and earnings momentum from AI and advanced packaging markets, with analyst consensus targeting $623.06 (implying ~49% upside from recent levels) and 32 combined strong buy/buy ratings. Quarterly revenue growth of 11.4% and EPS growth of 33.5% YoY signal accelerating adoption of AMAT's tools in leading-edge nodes.
Risks center on industry cyclicality, potential regulatory scrutiny on U.S.-China export controls for advanced equipment, and competition from ASML and Lam Research, mitigated by AMAT's 85.9% institutional ownership, diversified revenue across logic, memory, and display, and robust balance sheet supporting R&D. Macro headwinds like delayed fab builds are offset by long-term AI tailwinds and recurring service revenue streams.
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Applied Materials, Inc. is an American corporation that supplies equipment, services and software for the manufacture of semiconductor (integrated circuit) chips for electronics, flat panel displays for computers, smartphones and televisions, and solar products. The company also supplies equipment to produce coatings for flexible electronics, packaging and other applications. The company is headquartered in Santa Clara, California, in Silicon Valley.
Fundamental Snapshot
Revenue
29.024B
EBITDA
9.275B
Gross Profit
14.209B
Operating Margin
31.9%
Profit Margin
29.3%
ROE
39.7%
Book Value
$30.11
Beta
1.567
52-Wk High
$739.67
52-Wk Low
$153.78
Avg Volume
6.0424M
PEG Ratio
1.399
Frequently Asked Questions
What is Applied Materials' business model?
Applied Materials designs, manufactures, and sells equipment, services, and software for semiconductor chip production, flat panel displays, and solar products. It generates revenue primarily through equipment sales (deposition, etch, and inspection tools) plus high-margin recurring service and support contracts, with TTM revenue of $29.0B and gross profit of $14.2B.
What are AMAT's main revenue sources?
Revenue comes mainly from semiconductor systems (logic and memory), display, and applied global services. TTM revenue reached $29.0B with 11.4% YoY quarterly growth, driven by advanced packaging and AI-related demand; services contribute stable recurring income alongside equipment sales.
What competitive advantages does Applied Materials have?
AMAT holds leadership in semiconductor equipment with proprietary technologies in deposition and etch, supported by 85.9% institutional ownership and a 31.9% operating margin. Its scale, R&D investment, and installed base create high switching costs for customers, differentiating it from competitors like Lam Research.
What are the key risks for AMAT investors?
Primary risks include semiconductor industry cyclicality, U.S.-China trade restrictions on advanced tools, and macro slowdowns in capex. These are mitigated by diversification across end markets, strong balance sheet, and 0.34% dividend yield with ex-dividend date August 20, 2026.
What is the growth outlook for AMAT?
Growth is supported by AI and advanced node demand, with analyst target price of $623.06, forward P/E of 33.56, and 33.5% YoY EPS growth. Next earnings are expected around the fiscal quarter ending July 2026, with revenue growth projected to continue above 10% annually.
