Applied Materials, Inc.(AMAT) - Stock detail

Applied Materials, Inc.

US
AMAT
Applied Materials, Inc.(Listing date: 01/06/1978)

Applied Materials, Inc., founded in 1967, is a global company incorporated in Delaware with extensive capabilities in materials engineering. The company provides manufacturing equipment, services and software for the semiconductor, display and related industries. Leveraging its diverse technological capabilities, the company's products and services can enhance device performance, yield and cost. Its customers include manufacturers of semiconductor chips, liquid crystal and organic light-emitting diode (OLED) displays, and other electronic devices.

AI Value AnalystHold
Overall Rating5.7/10
Generated at:2026-04-21 00:00:00
Analysis based on 5 financial reports from 2024-07-28 to 2025-07-27 (Q3 2025). Data includes quarterly financial metrics for liquidity, leverage, profitability, and valuation. Current market price as of analysis date is $391.62. Analysis covers fundamental aspects including financial condition, profitability, and valuation.
Overview

Applied Materials, Inc. (AMAT) is a fundamentally strong company with a dominant industry position, excellent profitability, and a healthy balance sheet. However, the stock is trading at rich valuation multiples that appear to fully reflect its near-term growth prospects, limiting the margin of safety for new investments.

Valuation
2/10
Profitability
7/10
Financial health
8/10
Operation Advice
  • Maintain existing positions due to the company's quality, but avoid new capital allocation at current price levels.
  • A more attractive entry point would be within the $300-$370 range, with a fundamental target price of approximately $340-$360 based on moderated earnings multiples.

Valuation

P/E TTM
40.19
P/E LYR
38.72
P/B MRQ
14.51
P/S TTM
--
AI Analysis
  • Current valuation metrics suggest the stock is trading at a significant premium relative to historical norms and its own growth, with high P/E, P/B, and P/S ratios indicating limited room for error.
  • Current valuation metrics suggest the stock is trading at a significant premium relative to historical norms and its own growth.
  • Key multiples include P/E (TTM) of 40.19, Forward P/E of 38.72, P/B of 14.51, and P/S (TTM) of 14.41.
  • These multiples are very high, typically pricing in near-perfect execution and very high future growth.
  • The P/S ratio of 14.41 further confirms a premium valuation.
  • While justified by the company's leading market position and high ROE, these levels leave little room for error.
  • Based on the provided financials and high valuation multiples, the current price of $391.62 appears to be at the upper end of its reasonable valuation range, leaning towards overvalued in a purely fundamental context.
  • The market price reflects optimistic future growth expectations.
  • A more conservative fundamental range, considering a normalized high-growth premium, might be $300 - $370.
  • A 12-month fundamental target price, based on a moderation of earnings multiples towards a still-premium level, would be approximately $340 - $360.
Valuation trend

Profitability

ROE TTM
26.50%
Net margin
23.65%
Gross margin
48.88%
Total revenue
21.57B
AI Analysis
  • Profitability metrics show a company with very high efficiency and strong return metrics, albeit with some recent pressure on bottom-line growth and margin contraction.
  • Profitability metrics show a company with very high efficiency, albeit with some recent pressure on bottom-line growth.
  • Return on Equity (ROE) of 26.50% (TTM) and Return on Assets (ROA) of 14.87% (TTM) are exceptionally strong.
  • These figures indicate highly efficient use of shareholder capital and company assets to generate profits.
  • The company maintains stable and high Gross Margins near 49% (48.88% in Q3 2025).
  • However, the Net Profit Margin has shown some year-over-year contraction (23.65% in Q3 2025 vs. higher figures in prior periods).
  • The most recent quarterly data shows a -6.33% YoY decline in Net Income despite revenue growth, suggesting potential margin pressures from costs or mix.
  • Sequential quarterly data shows significant volatility in net income growth, with a sharp decline of -41.31% YoY in Q1 2025 followed by a recovery.
  • This underscores the cyclical nature of the semiconductor equipment business.
Profitability
2024Q32024Q42025Q12025Q22025Q3
ROE TTM--40.61%6.30%17.50%26.50%
Earnings
2024Q32024Q42025Q12025Q22025Q3
Total revenue20.13B27.18B7.17B14.27B21.57B

Financial health

Debt/Asset
42.99%
Current ratio
2.50
Quick ratio
1.76
Cash ratio
1.76
AI Analysis
  • Applied Materials demonstrates a solid and healthy financial position with strong liquidity, moderate leverage, and a robust balance sheet capable of weathering industry cycles.
  • Based on the latest reported data (Q3 2025), Applied Materials demonstrates a solid and healthy financial position.
  • The company exhibits strong short-term financial health with a Current Ratio of 2.50 and a Quick Ratio of 1.76.
  • These figures indicate ample ability to cover short-term obligations without stress.
  • The Debt-to-Asset ratio of 42.99% suggests a moderate level of leverage.
  • This is a manageable capital structure for a capital-intensive business, providing balance between funding growth and maintaining financial flexibility.
  • It does not indicate excessive risk.
  • The combination of high liquidity and moderate leverage points to a robust balance sheet capable of weathering industry downturns and funding R&D and strategic initiatives.
Leverage
2024Q32024Q42025Q12025Q22025Q3
Debt/Asset44.01%44.78%44.13%43.62%42.99%
Liquidity
2024Q32024Q42025Q12025Q22025Q3
Current ratio2.862.512.672.462.50