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Applied Materials, Inc. (AMAT) stock analysis

Applied Materials rebounds 2.15% after a steep October slide that left shares 46.47% below the June high

Applied Materials closed at 395.93 on Oct 27, 2026, up 2.15% on the day but down 18.66% over one month and 46.47% below its 52-week high of 739.67. Fundamentals are strong, with quarterly revenue growth of 34.04% and a forward P/E of 21.10 (on next year's consensus EPS), slightly below the industry median. Earnings are due Nov 12, 2026, with options pricing an 8.44% move.

  • Price: 395.93
  • Market Cap (USD): $314.37B
  • P/E: 33.46×
  • Fwd P/E: 21.10×
  • Div Yield: 0.50%
  • 1Y Return: 73.08%
  • Next Earnings: Nov 12, 2026
  • Mean Target: 639.87
  • Rating: Strong Buy

Bull case

  • Latest-quarter revenue grew 34.04% year over year and EPS grew 33.19%, while revenue growth has accelerated for 4 quarters.
  • The forward P/E of 21.10 sits 5.16% below the industry median of 22.25, and consensus expects next-year EPS growth of 31.00%, in the 75th percentile of US Technology.
  • Analysts are positive: 24 analysts carry a mean target of 639.87 (61.61% above the price), 43 of the Buy/Strong Buy ratings versus 12 Holds and no Sells, and the company has beaten EPS estimates 18 times in a row.

Bear case

  • The stock fell from 520.65 on Oct 7 to 375.58 on Oct 22, and it trades 13.94% below its 20-day average and 10.61% below its 200-day average.
  • Evercore ISI cut its target to 590 from 700 on Oct 15 and Morgan Stanley cut to 563 from 642 on Sep 28, while free cash flow growth was -18.92% year over year.
  • China made up 30.07% of fiscal 2025 revenue, and the CEO sold shares worth millions in June 2026; insiders made 3 sales and no buys in the last 90 days (net -4.5M).

What to watch

  • Next earnings on Nov 12, 2026 (confirmed), with consensus EPS of 4.06 and an implied move of 8.44%.
  • Ex-dividend date Nov 19, 2026 for the 0.53 quarterly dividend.
  • Resistance near the 10-day average of 404.93 and the 200-day average of 442.94; the 20-day low of 372.80 as nearby support.
  • The 52-week high of 739.67 and low of 203.40 as the outer range.

General

Applied Materials supplies wafer fabrication equipment and services to chipmakers. Business results are accelerating, but the share price has dropped sharply since June. Valuation is near peer medians and analysts remain positive, while volatility is high.

Business

Per its profile, the company provides materials engineering solutions for semiconductor production through two segments: Semiconductor Systems and Applied Global Services. In fiscal 2025, Semiconductor Systems was 73.31% of revenue and services 22.51%. Trailing revenue is $31.05B with an operating margin of 31.53%.

Recent performance

The latest quarter (ended Jul 26, 2026) showed revenue of 9.12B and diluted EPS of 3.17, against 7.30B and 2.21 a year earlier. The stock is up 54.06% year to date but down 18.66% over one month, with a Oct 22 low of 372.80 inside the 20-day range.

Valuation and analysts

The forward P/E of 21.10 is based on next year's consensus EPS and is close to the sector median of 21.60. Trailing P/E is 33.46. Analyst ratings lean Buy, though several firms trimmed targets in recent weeks. Evercore ISI and Morgan Stanley cut; UBS raised to 695 on Sep 1.

Long-term investor

The company combines high returns on capital and a net cash balance sheet with recent growth acceleration. Longer-term growth has been slower, and the valuation is near peer medians rather than cheap. Insider selling and falling free cash flow are points to monitor.

Growth durability

Revenue rose from 23.06B in fiscal 2021 to 28.37B in fiscal 2025, a 5-year CAGR of 10.52% but only 3.23% over 3 years. Recent quarters have been stronger: Q3 FY2026 revenue was 9.12B versus 7.30B a year earlier. Consensus next-year EPS growth is 31.00%.

Returns and balance sheet

ROIC is 32.58% (74th percentile) and ROE 40.82% (79th percentile). Debt of 7.35B is more than offset by cash, leaving net debt of -1.89B and debt to equity of 0.29. Interest coverage is 35.60. Operating margin improved 2.31% over the year.

Capital return and ownership

Fiscal 2025 buybacks were 4.89B and dividends 1.38B; diluted shares fell from 919.0M in fiscal 2021 to 808.0M in fiscal 2025. The dividend has grown for 8 years, with a 0.50% yield. Institutions hold 84.27%. Free cash flow of 4.62B is a 1.47% yield, and FCF fell 18.92% year over year.

Valuation and insiders

Price to sales is 10.12 (65th percentile) and EV/EBITDA 26.93 (55th). PEG is 0.68. The CEO sold multiple blocks in June 2026 at prices from 590.03 to 735.22; there were 3 insider sales and no buys in the last 90 days.

Swing trader

The trend is sharply down: price is below its 20-, 50- and 200-day averages after a drop from about 520 to 375 in two weeks. Short-term oversold readings and a two-day bounce make this a volatile, headline-driven setup into earnings.

Trend and momentum

Price of 395.93 is 13.94% below the 20-day average (460.08), 14.53% below the 50-day (463.24) and 10.61% below the 200-day (442.94). RSI(14) is 34.08, MACD is -26.97 versus a signal of -18.01, and ADX is 32.08, indicating a firm trend. Stochastic K is 15.36.

Recent sessions and levels

Shares gapped lower on Oct 22 to a 375.58 close on 13.0M volume, then rose on Oct 23, 26 and 27. The Oct 27 range was 385.31 to 398.95. Support is the 20-day low of 372.80; the 10-day average is 404.93, and the lower Bollinger band is 341.64.

Volatility and flows

ATR is 19.14, or 4.83% of price. 30-day realized volatility is 52.58%. Short interest was 14.2M shares (1.79% of float) on Oct 15, up 4.79%. Relative strength over 3 months is -14.84%, though the relative strength rating is 86.

Calendar

Earnings land on Nov 12, 2026 (16 days), and the ex-dividend date is Nov 19. Recent analyst actions were mostly reiterations from Cantor Fitzgerald, plus target cuts from Evercore ISI and Morgan Stanley.

Options

Implied volatility is elevated in absolute terms but mid-range versus its own year, and it sits modestly above realized volatility. The term structure is inverted and earnings fall inside the 30-day expiry. Liquidity is strong.

Volatility level

30-day implied volatility is 57.62%, against a 52-week range of 33.97% to 100.99%; IV rank is 35 and IV percentile 62. Implied is 1.10 times 30-day realized volatility (a +5.0 point spread), so premium is modestly rich versus realized.

Term structure and skew

The structure is in backwardation: 30-day IV exceeds 90-day (52.90%) by 4.7 points, reflecting near-term event demand. The 25-delta skew is +1.7 points. The 7-day expected move is 7.98% and the 30-day expected move is 16.52%.

Earnings

The implied earnings move for Nov 12 is 8.44%, 1.38 times the 4-quarter average actual move of 3.79%, though the 8-quarter average is 6.13% and the maximum was 14.88%. Average IV crush is 12.16%. Earnings occur before the Nov 27 expiry.

Premium yields and liquidity

For the Nov 27 expiry (31 days), the 30-delta put at 370.00 has a premium of 17.20 (annualized cash-secured yield 54.73%), and the 30-delta call at 440.00 has 9.00 (covered call yield 26.76%). Liquidity score is 95; put/call open interest is 1.46. An ex-dividend date falls before expiry.

Analysis written October 28, 2026 from Qanvo data as of October 27, 2026. AI-generated, for information only; not investment advice.