Applied Materials (NASDAQ:AMAT) Shares Gap Up – Still a Buy?

Shares of Applied Materials, Inc. (NASDAQ:AMAT) gapped up before the market opened on Thursday . The stock had previously closed at $588.97, but opened at $637.74. Applied Materials shares last traded at $617.3870, with a volume of 2,037,412 shares traded.

Key Headlines Impacting Applied Materials

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

• Positive Sentiment: Applied Materials introduced new systems for DRAM and advanced packaging, expanding its role in AI chip manufacturing and potentially boosting future demand. Applied Materials Introduces New Systems to Accelerate DRAM and Advanced Packaging for AI Chips
• Positive Sentiment: Analysts said AMAT’s event highlighted strong opportunities in DRAM and advanced packaging, reinforcing the company’s AI-driven growth narrative. Applied Materials’ event focuses on DRAM, and advanced packaging: analysts
• Positive Sentiment: Wall Street commentary remains constructive, with analysts still confident in Applied Materials’ strong competitive position. AMAT stock gets thumbs up from Wall Street – analysts remain confident about Applied Materials’ strong market position
• Neutral Sentiment: Some coverage suggests the stock may be looking expensive after its recent rally, which could limit near-term upside even if the long-term AI story stays intact. Applied Materials stock looks pricey—can AI demand justify the rally?
• Neutral Sentiment: One analysis noted that Applied Materials’ aggressive investment strategy may pressure cash flow in the near term, even though it supports longer-term growth. Can AMAT’s Investment Strategy Lift Future Cash Flow Growth?

Wall Street Analysts Forecast Growth

Several analysts have recently issued reports on the stock. Cantor Fitzgerald boosted their price objective on shares of Applied Materials from $575.00 to $650.00 and gave the company an “overweight” rating in a research note on Wednesday, June 10th. UBS Group lifted their target price on Applied Materials from $515.00 to $570.00 and gave the company a “buy” rating in a report on Wednesday, June 10th. JPMorgan Chase & Co. boosted their price target on Applied Materials from $400.00 to $515.00 and gave the company an “overweight” rating in a research report on Friday, May 15th. Bank of America upped their price target on Applied Materials from $540.00 to $720.00 and gave the stock a “buy” rating in a research note on Tuesday. Finally, Weiss Ratings restated a “buy (b-)” rating on shares of Applied Materials in a report on Wednesday. Twenty-seven investment analysts have rated the stock with a Buy rating and eight have assigned a Hold rating to the stock. According to MarketBeat.com, Applied Materials has an average rating of “Moderate Buy” and an average price target of $518.19.

Applied Materials Stock Performance

The company has a current ratio of 2.51, a quick ratio of 1.80 and a debt-to-equity ratio of 0.22. The firm has a market cap of $497.69 billion, a PE ratio of 58.86, a P/E/G ratio of 1.86 and a beta of 1.67. The stock’s 50 day moving average price is $473.54 and its 200 day moving average price is $377.36.

Applied Materials (NASDAQ:AMAT) last announced its quarterly earnings results on Thursday, May 14th. The manufacturing equipment provider reported $2.86 earnings per share for the quarter, topping analysts’ consensus estimates of $2.68 by $0.18. Applied Materials had a net margin of 29.31% and a return on equity of 36.97%. The firm had revenue of $7.91 billion during the quarter, compared to analysts’ expectations of $7.68 billion. During the same period in the prior year, the company earned $2.39 EPS. The firm’s revenue was up 11.4% on a year-over-year basis. Applied Materials has set its Q3 2026 guidance at 3.160-3.560 EPS. As a group, equities analysts forecast that Applied Materials, Inc. will post 12.1 earnings per share for the current fiscal year.

Applied Materials Dividend Announcement

The business also recently announced a quarterly dividend, which will be paid on Thursday, September 10th. Stockholders of record on Thursday, August 20th will be given a $0.53 dividend. The ex-dividend date of this dividend is Thursday, August 20th. This represents a $2.12 annualized dividend and a dividend yield of 0.3%. Applied Materials’s dividend payout ratio is presently 19.91%.

Insiders Place Their Bets

In related news, Director Thomas J. Iannotti sold 9,250 shares of the firm’s 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 sale, the director directly owned 40,559 shares in the company, valued at approximately $24,326,071.43. This trade represents a 18.57% decrease in their position. The sale was disclosed in a filing with the SEC, which can be accessed through this link. Also, insider Prabu G. Raja sold 10,000 shares of the business’s stock in a transaction that occurred on Thursday, June 18th. The stock was sold at an average price of $633.53, for a total value of $6,335,300.00. Following the transaction, the insider directly owned 346,642 shares in the company, valued at $219,608,106.26. This trade represents a 2.80% decrease in their ownership of the stock. The disclosure for this sale is available in the SEC filing. In the last quarter, insiders have sold 199,767 shares of company stock valued at $114,104,709. Company insiders own 0.30% of the company’s stock.

Institutional Inflows and Outflows

Institutional investors and hedge funds have recently made changes to their positions in the company. Cornerstone Financial Management LLC purchased a new stake in Applied Materials during the 4th quarter worth $25,000. Wilkerson Advisory Group LLC purchased a new position in Applied Materials in the 4th quarter valued at about $26,000. Financial Freedom LLC acquired a new stake in shares of Applied Materials during the first quarter valued at about $28,000. Highline Wealth Partners LLC increased its position in shares of Applied Materials by 48.7% during the fourth quarter. Highline Wealth Partners LLC now owns 116 shares of the manufacturing equipment provider’s stock worth $30,000 after acquiring an additional 38 shares during the last quarter. Finally, Joseph Group Capital Management purchased a new stake in shares of Applied Materials during the fourth quarter worth about $31,000. 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.