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:2026-06-05 17:40:57
Analysis based on real data for Applied Materials, Inc. (AMAT). A total of 5 financial reports were used for financial analysis, dated: 2025-07-27, 2025-04-27, 2025-01-26, 2024-10-27, and 2024-07-28. The current stock price is as of the close on 2026-06-05.
Overview

Applied Materials, Inc. (AMAT) is a fundamentally strong company with a dominant market position in the semiconductor equipment sector, excellent profitability, and solid financial health. However, the stock is trading at rich valuation multiples while showing a trend of declining year-over-year net income, creating a challenging investment case at the current price.

Valuation
2/10
Profitability
7/10
Financial health
8/10
Operation Advice
  • The recommendation is Hold.
  • Existing shareholders should maintain their positions due to the company's quality.
  • New investors should await a better risk-reward profile, either through a clearer recovery in earnings growth or a more substantial price correction.
  • A reasonable near-term fundamental price range is $400 - $470, with a more conservative target of $380 - $450.

Valuation

P/E TTM
46.82
P/E LYR
38.72
P/B MRQ
16.66
P/S TTM
--
AI Analysis
  • Valuation metrics indicate the stock is trading at a significant premium, with elevated P/E, P/B, and P/S ratios. Given the high multiples and recent downtrend in net income, the stock appears fully valued or potentially overvalued based on traditional fundamental metrics.
  • The forward P/E is 38.72 and the trailing twelve-month (TTM) P/E is 46.82, which are elevated multiples, especially for a company in a cyclical industry.
  • The Price-to-Book (P/B) ratio is 16.66, which is very high, reflecting the market's premium on its intangible assets, technology, and market position.
  • The Price-to-Sales (P/S) ratio of 16.68 further confirms the premium valuation, pricing in high growth expectations.
  • The stock has experienced significant volatility, trading between approximately $320 and $510 over the last 60 days.
  • The recent close of $453.01 is near the middle of this wide range but follows a sharp -9.71% drop on June 5th.
  • Given the high valuation multiples and the recent downtrend in net income growth, the stock appears to be fully valued or potentially overvalued based on traditional fundamental metrics.
  • A reasonable near-term fundamental price range, acknowledging its premium status but also the earnings pressure, would be $400 - $470.
  • A more conservative target, assuming some multiple contraction, would be $380 - $450.
Valuation trend

Profitability

ROE TTM
26.50%
Net margin
23.65%
Gross margin
48.88%
Total revenue
21.57B
AI Analysis
  • Applied Materials exhibits exceptional profitability with high margins and outstanding returns on capital. However, a key concern is the trend of declining year-over-year net income in recent quarters, suggesting margin compression or increased costs.
  • The company maintains impressive gross margins near 49% and net margins above 23%, indicating efficient operations and strong pricing power within its niche.
  • The Return on Equity (ROE) of 26.50% and Return on Assets (ROA) of 14.87% are outstanding, demonstrating highly effective use of shareholder capital and company assets to generate profits.
  • Revenue growth remains positive, with an example of +7.14% YoY in Q3 2025.
  • A key concern is that net income has declined year-over-year in the last three reported quarters (-41.31%, -11.20%, -6.33%).
  • This trend of declining net income suggests margin compression or increased costs, which is a key point for monitoring.
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 strong financial health with robust liquidity, a moderate and manageable level of leverage, and high profitability that typically supports strong operational cash generation.
  • The current ratio of 2.50 and quick ratio of 1.76 indicate a robust ability to meet short-term obligations, with a comfortable buffer of liquid assets.
  • A debt-to-asset ratio of 42.99% suggests a moderate level of leverage.
  • This capital structure is manageable and provides financial flexibility without excessive risk.
  • While the provided data lacks direct cash flow metrics, the high profitability typically supports strong operational cash generation, which further underpins financial stability.
Leverage
2024Q32024Q42025Q12025Q22025Q3
Debt/Asset44.01%44.78%44.13%43.62%42.99%
Liquidity
2024Q32024Q42025Q12025Q22025Q3
Current ratio2.862.512.672.462.50