Applied Materials (NASDAQ:AMAT) Shares Gap Down – Here’s Why

Applied Materials, Inc. (NASDAQ:AMAT)’s stock price gapped down prior to trading on Friday . The stock had previously closed at $534.54, but opened at $499.40. Applied Materials shares last traded at $511.8660, with a volume of 3,557,441 shares traded.

Applied Materials News Roundup

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

• Positive Sentiment: AI demand is driving strong fundamentals. Fiscal Q3 revenue rose 24.8% year over year to $9.12 billion, exceeding the $8.99 billion consensus estimate, while adjusted EPS of $3.50 topped expectations near $3.40. Advanced packaging, memory and AI infrastructure were key growth drivers. Applied Materials Q3 Earnings Beat Estimates, Revenues Rise Y/Y
• Positive Sentiment: Management raised near-term expectations and sees extended visibility. Q4 revenue guidance of $9.8 billion-$10.8 billion and EPS guidance of $3.82-$4.22 are above consensus estimates of approximately $9.5 billion and $3.65, respectively. Management also cited stronger systems growth and customer demand extending into fiscal 2027 and beyond. Applied Materials Forecasts Quarterly Revenue Above Estimates
• Positive Sentiment: Analyst sentiment remains supportive. JPMorgan raised its price target to $660 with an overweight rating, while RBC increased its target to $600 and assigned an outperform rating. Needham maintained a buy rating with a $740 target. Stock Market Today
• Neutral Sentiment: Investor focus is shifting to execution. Future results will be judged on systems growth, gross margins and evidence that AI-related capital spending is translating into sustained orders. Applied Materials reported a 50.4% non-GAAP Q3 gross margin, and management will participate in upcoming investor conferences. Applied Materials to Participate in Upcoming Investor Conferences
• Negative Sentiment: The earnings beat was not large enough for the market. After AMAT’s substantial year-to-date advance, investors were looking for an even faster growth trajectory. Reports also cited competitive pressure and concerns that guidance, while above estimates, did not clear the elevated “perfect execution” bar. Applied Materials Slips as Investors Seek Faster Growth After Stellar Run

Wall Street Analyst Weigh In

AMAT has been the topic of several recent research reports. Barclays lifted their target price on shares of Applied Materials from $500.00 to $590.00 and gave the stock an “overweight” rating in a research note on Thursday, June 11th. Wolfe Research raised their price target on shares of Applied Materials from $500.00 to $550.00 and gave the stock an “outperform” rating in a research note on Friday, May 15th. Sanford C. Bernstein restated an “outperform” rating and set a $700.00 price target on shares of Applied Materials in a research report on Friday. The Goldman Sachs Group reaffirmed a “buy” rating and set a $645.00 price objective on shares of Applied Materials in a research note on Monday, August 3rd. Finally, William Blair began coverage on shares of Applied Materials in a report on Tuesday. They issued a “market perform” rating for the company. One equities research analyst has rated the stock with a Strong Buy rating, twenty-seven have issued a Buy rating and seven have assigned a Hold rating to the stock. According to data from MarketBeat, the stock has an average rating of “Moderate Buy” and an average price target of $611.61.

Applied Materials Stock Down 5.5%

The firm has a market capitalization of $400.94 billion, a price-to-earnings ratio of 47.40, a P/E/G ratio of 1.38 and a beta of 1.61. The business has a 50 day simple moving average of $563.06 and a 200-day simple moving average of $444.45. The company has a debt-to-equity ratio of 0.22, a quick ratio of 1.80 and a current ratio of 2.51.

Applied Materials (NASDAQ:AMAT) last announced its quarterly earnings results on Thursday, August 13th. The manufacturing equipment provider reported $3.50 earnings per share for the quarter, beating the consensus estimate of $3.40 by $0.10. Applied Materials had a net margin of 29.31% and a return on equity of 36.97%. The firm had revenue of $9.12 billion for the quarter, compared to analysts’ expectations of $8.99 billion. During the same quarter in the previous year, the company posted $2.48 EPS. The company’s revenue was up 24.8% compared to the same quarter last year. Applied Materials has set its Q4 2026 guidance at 3.820-4.220 EPS. On average, equities analysts expect that Applied Materials, Inc. will post 12.22 EPS for the current year.

Applied Materials Announces Dividend

The firm also recently announced a quarterly dividend, which will be paid on Thursday, September 10th. Shareholders of record on Thursday, August 20th will be given a $0.53 dividend. The ex-dividend date is Thursday, August 20th. This represents a $2.12 dividend on an annualized basis and a yield of 0.4%. Applied Materials’s payout ratio is currently 19.91%.

Insiders Place Their Bets

In related news, CEO Gary E. Dickerson sold 71,727 shares of the business’s stock in a transaction dated Tuesday, June 16th. The shares were sold at an average price of $593.75, for a total value of $42,587,906.25. Following the sale, the chief executive officer directly owned 1,695,164 shares in the company, valued at approximately $1,006,503,625. The trade was a 4.06% decrease in their position. The sale was disclosed in a filing with the Securities & Exchange Commission, which is accessible through this link. Also, Director Thomas J. Iannotti sold 9,250 shares of the stock in a transaction dated Tuesday, June 16th. The stock was sold at an average price of $599.77, for a total transaction of $5,547,872.50. Following the transaction, the director directly owned 40,559 shares of the company’s stock, valued at approximately $24,326,071.43. This trade represents a 18.57% decrease in their position. Additional details regarding this sale are available in the official SEC disclosure. Over the last quarter, insiders have sold 278,088 shares of company stock worth $169,654,805. Corporate insiders own 0.30% of the company’s stock.

Institutional Inflows and Outflows

Hedge funds and other institutional investors have recently modified their holdings of the company. JFS Wealth Advisors LLC raised its holdings in shares of Applied Materials by 4.3% in the 2nd quarter. JFS Wealth Advisors LLC now owns 409 shares of the manufacturing equipment provider’s stock valued at $296,000 after buying an additional 17 shares during the period. Innovative Asset Advisors Group LLC boosted its holdings in Applied Materials by 2.1% during the 2nd quarter. Innovative Asset Advisors Group LLC now owns 961 shares of the manufacturing equipment provider’s stock valued at $695,000 after acquiring an additional 20 shares during the period. Stonebridge Financial Group LLC grew its position in Applied Materials by 2.1% in the 2nd quarter. Stonebridge Financial Group LLC now owns 1,003 shares of the manufacturing equipment provider’s stock valued at $725,000 after acquiring an additional 21 shares in the last quarter. N.E.W. Advisory Services LLC grew its position in Applied Materials by 5.9% in the 2nd quarter. N.E.W. Advisory Services LLC now owns 377 shares of the manufacturing equipment provider’s stock valued at $273,000 after acquiring an additional 21 shares in the last quarter. Finally, IMG Wealth Management Inc. lifted its position in shares of Applied Materials by 13.0% during the second quarter. IMG Wealth Management Inc. now owns 183 shares of the manufacturing equipment provider’s stock worth $132,000 after purchasing an additional 21 shares in the last quarter. 80.56% of the stock is currently owned by hedge funds and other 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.