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:2026-06-11 17:41:31
Analysis based on real data for Applied Materials, Inc. (AMAT). A total of 5 financial reports were used for financial analysis, covering periods: 2025-07-27, 2025-04-27, 2025-01-26, 2024-10-27, and 2024-07-28. The current stock price as of the latest data (2026-06-11) is $552.64.
Overview

Applied Materials, Inc. (AMAT) is a fundamentally strong company with a leading market position in semiconductor manufacturing equipment. It exhibits robust profitability, solid financial health, and excellent operational efficiency. However, its current stock price appears significantly overvalued based on trailing earnings, following a sharp 58% price surge in recent months, which has pushed valuation multiples to historically high levels.

Valuation
2/10
Profitability
7/10
Financial health
8/10
Operation Advice
  • Hold for existing shareholders to benefit from the company's operational strength, but do not initiate new positions at the current price.
  • The stock is considered overvalued based on trailing earnings.
  • A more attractive entry point would be closer to the lower end of the calculated fundamental target range of $357.60 to $417.20.
  • The stock price is vulnerable to a correction if growth expectations are not met or if market sentiment shifts.

Valuation

P/E TTM
46.38
P/E LYR
38.72
P/B MRQ
16.50
P/S TTM
--
AI Analysis
  • Valuation metrics suggest the stock is trading at a significant premium. The forward P/E is 38.72 and trailing P/E is 46.38, both elevated, indicating high market growth expectations. The P/B ratio is 16.50 and P/S ratio is 20.34, also at premium levels. Based on trailing earnings and a more normalized P/E range of 30-35, the fundamental target price range is $357.60 to $417.20, well below the current price of $552.64, suggesting the stock is overvalued.
  • The forward-looking (dynamic) P/E is 38.72, while the trailing P/E (TTM) is 46.38. Both figures are elevated, indicating the market has high growth expectations priced in.
  • The P/B ratio is 16.50. This is very high, reflecting the market's valuation of the company's intangible assets far above its accounting book value.
  • The P/S ratio (TTM) is 20.34, which is also at a premium level, typical for high-growth, market-leading tech companies.
  • The stock has experienced significant volatility and appreciation in the recent 60-day trading window, rising from around $349 in mid-March 2026 to over $552 by June 11, 2026—an increase of approximately 58%.
  • The most recent close of $552.64 appears to be near the peak of this recent surge.
  • Using the TTM EPS implied by the P/E-TTM of 46.38 and the current price, the TTM EPS is approximately $11.92.
  • Assuming a more normalized, yet still premium, P/E range of 30-35 for a market leader, a fundamental-based target price range would be $357.60 to $417.20.
  • The current price of $552.64 is significantly above this range, suggesting the stock is overvalued based on trailing earnings.
Valuation trend

Profitability

ROE TTM
26.50%
Net margin
23.65%
Gross margin
48.88%
Total revenue
21.57B
AI Analysis
  • Applied Materials exhibits robust and stable profitability metrics. It maintains high and consistent gross margins around 48-49%. The net margin for the latest reported quarter was a strong 23.65%, demonstrating excellent operational efficiency. While year-over-year net profit growth has been volatile recently, revenue growth has remained positive, with the latest quarter showing a 7.14% increase.
  • The company maintains high and consistent gross margins, averaging around 48-49% across recent quarters.
  • The net margin for the latest reported quarter (Q3 2025) was a strong 23.65%, demonstrating excellent operational efficiency and pricing power.
  • While year-over-year net profit growth has been volatile in recent quarters (e.g., -41.31% in Q1 2025, -6.33% in Q3 2025), revenue growth has remained positive.
  • The latest quarter showed a 7.14% revenue increase.
  • This suggests potential short-term cost pressures or investment phases rather than a fundamental demand issue.
  • The annual data for FY2024 showed solid growth in both revenue (2.49%) and net profit (4.68%).
  • The diluted EPS for the latest quarter was $6.29, contributing to a trailing twelve-month (TTM) earnings base that supports valuation metrics.
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
  • The company demonstrates a strong and healthy financial position. It has ample short-term liquidity with a current ratio of 2.50 and quick ratio of 1.76. It maintains a moderate level of leverage with a debt-to-asset ratio of 42.99%. It shows efficient use of capital with a high Return on Equity (ROE-TTM) of 26.50% and Return on Assets (ROA-TTM) of 14.87%.
  • The current ratio of 2.50 and quick ratio of 1.76 indicate ample short-term liquidity to cover obligations, well above the typical healthy threshold of 1.0.
  • The debt-to-asset ratio of 42.99% shows a moderate level of leverage.
  • This suggests the company uses debt effectively to finance growth without being overburdened, maintaining a balanced capital structure.
  • A high Return on Equity (ROE-TTM) of 26.50% and Return on Assets (ROA-TTM) of 14.87% indicate efficient use of shareholder capital and company assets to generate profits.
Leverage
2024Q32024Q42025Q12025Q22025Q3
Debt/Asset44.01%44.78%44.13%43.62%42.99%
Liquidity
2024Q32024Q42025Q12025Q22025Q3
Current ratio2.862.512.672.462.50