Applied Materials (NASDAQ:AMAT) Stock Price Up 5.3% – Still a Buy?

Applied Materials, Inc. (NASDAQ:AMAT)’s stock price rose 5.3% during mid-day trading on Tuesday . The stock traded as high as $456.78 and last traded at $454.89. Approximately 8,037,751 shares were traded during mid-day trading, an increase of 9% from the average daily volume of 7,357,150 shares. The stock had previously closed at $432.16.

Key Headlines Impacting Applied Materials

Here are the key news stories impacting Applied Materials this week:

• Positive Sentiment: CEO Gary Dickerson said the semiconductor industry is experiencing its strongest period ever, with AI driving powerful long-term demand for chip equipment. CNBC article
• Positive Sentiment: Cantor Fitzgerald reiterated an Overweight rating and raised its price target to $575, signaling continued confidence in Applied Materials’ growth outlook. Benzinga report on Applied Materials analyst target raise
• Positive Sentiment: Applied Materials’ recent partnership and packaging initiatives with Broadcom and SCREEN Semiconductor Solutions are being viewed as incremental wins for its AI chip packaging strategy. Applied Materials partners with Broadcom on advanced chip packaging technologies for AI systems
• Positive Sentiment: The company’s latest earnings beat expectations and it raised third-quarter guidance, reinforcing the view that demand remains strong. Applied Materials is up after raising Q3 outlook and expanding AI packaging alliance
• Neutral Sentiment: Director Judy Bruner and CAO Adam Sanders both sold small amounts of stock, but the transactions were relatively modest and do not appear to change the broader investment story. Insider trade filing for Judy Bruner

Wall Street Analyst Weigh In

AMAT has been the subject of several recent analyst reports. Morgan Stanley reiterated an “equal weight” rating and issued a $502.00 target price (up from $454.00) on shares of Applied Materials in a research note on Friday, May 15th. Citigroup raised their price objective on shares of Applied Materials from $420.00 to $520.00 and gave the stock a “buy” rating in a research report on Tuesday, May 12th. Deutsche Bank Aktiengesellschaft raised their price objective on shares of Applied Materials from $450.00 to $550.00 and gave the stock a “buy” rating in a research report on Friday, May 15th. DZ Bank upgraded shares of Applied Materials to a “hold” rating in a research report on Monday, February 16th. Finally, Zacks Research downgraded shares of Applied Materials from a “strong-buy” rating to a “hold” rating in a research report on Monday, April 27th. Twenty-seven investment analysts have rated the stock with a Buy rating and eight have given a Hold rating to the company’s stock. According to data from MarketBeat.com, the company has an average rating of “Moderate Buy” and an average price target of $470.13.

Applied Materials Price Performance

The company’s fifty day moving average price is $395.24 and its 200 day moving average price is $332.67. The company has a market capitalization of $357.03 billion, a P/E ratio of 42.22, a PEG ratio of 1.26 and a beta of 1.66. The company has a quick ratio of 1.80, a current ratio of 2.51 and a debt-to-equity ratio of 0.22.

Applied Materials (NASDAQ:AMAT) last announced its earnings results on Thursday, May 14th. The manufacturing equipment provider reported $2.86 EPS for the quarter, topping the consensus estimate of $2.68 by $0.18. Applied Materials had a net margin of 29.31% and a return on equity of 36.97%. The company had revenue of $7.91 billion for the quarter, compared to analysts’ expectations of $7.68 billion. During the same period last year, the firm earned $2.39 earnings per share. The business’s revenue for the quarter was up 11.4% on a year-over-year basis. Applied Materials has set its Q3 2026 guidance at 3.160-3.560 EPS. As a group, sell-side analysts forecast that Applied Materials, Inc. will post 12.02 EPS for the current year.

Applied Materials Increases Dividend

The firm also recently announced a quarterly dividend, which will be paid on Thursday, June 11th. Stockholders of record on Thursday, May 21st will be issued a dividend of $0.53 per share. This is a boost from Applied Materials’s previous quarterly dividend of $0.46. This represents a $2.12 annualized dividend and a dividend yield of 0.5%. The ex-dividend date of this dividend is Thursday, May 21st. Applied Materials’s payout ratio is 19.91%.

Insider Activity at Applied Materials

In other news, Director Judy Bruner sold 1,128 shares of the firm’s stock in a transaction that occurred on Tuesday, May 26th. The shares were sold at an average price of $450.00, for a total transaction of $507,600.00. Following the transaction, the director directly owned 26,544 shares of the company’s stock, valued at approximately $11,944,800. This trade represents a 4.08% decrease in their ownership of the stock. The sale was disclosed in a document filed with the Securities & Exchange Commission, which can be accessed through this hyperlink. Also, CAO Adam Sanders sold 268 shares of the firm’s stock in a transaction that occurred on Friday, May 22nd. The stock was sold at an average price of $434.22, for a total transaction of $116,370.96. Following the transaction, the chief accounting officer directly owned 4,280 shares in the company, valued at $1,858,461.60. This represents a 5.89% decrease in their ownership of the stock. The SEC filing for this sale provides additional information. 0.30% of the stock is currently owned by company insiders.

Institutional Inflows and Outflows

A number of hedge funds have recently added to or reduced their stakes in the company. Alpine Woods Capital Investors LLC bought a new position in Applied Materials in the first quarter valued at approximately $233,000. Allen Capital Group LLC increased its stake in Applied Materials by 22.2% in the first quarter. Allen Capital Group LLC now owns 1,850 shares of the manufacturing equipment provider’s stock valued at $632,000 after acquiring an additional 336 shares during the last quarter. Westshore Wealth LLC increased its stake in Applied Materials by 10.9% in the first quarter. Westshore Wealth LLC now owns 1,015 shares of the manufacturing equipment provider’s stock valued at $347,000 after acquiring an additional 100 shares during the last quarter. Summit Financial Wealth Advisors LLC bought a new position in Applied Materials in the first quarter valued at approximately $211,000. Finally, Axiom Investment Management LLC bought a new position in Applied Materials in the first quarter valued at approximately $210,000. 80.56% of the stock is owned by institutional investors.

About Applied Materials

Applied Materials, Inc is a U.S.-based supplier of equipment, services and software used to manufacture semiconductor chips, flat panel displays and other advanced materials. Headquartered in Santa Clara, California, the company designs and sells capital equipment and related technologies that enable production of integrated circuits, display panels and materials used across the electronics supply chain.

Applied Materials’ offerings include process equipment and factory software that support critical steps in device fabrication, such as deposition, etch, implantation, inspection and metrology, as well as systems for packaging and advanced heterogeneous integration.