Applied Materials (NASDAQ:AMAT) Trading Down 4.1% – What’s Next?

Shares of Applied Materials, Inc. (NASDAQ:AMAT) fell 4.1% during trading on Thursday . The stock traded as low as $406.01 and last traded at $410.8330. 7,135,219 shares were traded during mid-day trading, a decline of 1% from the average session volume of 7,175,017 shares. The stock had previously closed at $428.62.

Key Headlines Impacting Applied Materials

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

• Positive Sentiment: Seaport Research initiated coverage with a Buy and $500 price target, calling AMAT best positioned among wafer fab equipment suppliers — a bullish analyst endorsement supporting longer-term demand assumptions. Seaport Research Initiates Coverage of Applied Materials (AMAT) with Buy
• Positive Sentiment: Applied agreed to acquire the NEXX business from ASMPT, adding panel-level advanced packaging tools aimed at AI chip packaging — a strategic M&A move that broadens AMAT’s addressable market in AI infrastructure. Applied Materials Expands AI Packaging With NEXX Deal As Stock Surges
• Positive Sentiment: Pre-earnings analyst support has increased (including a Morgan Stanley upgrade), which bolsters sentiment heading into the report. Morgan Stanley upgrades Applied Materials stock price target pre-earnings
• Neutral Sentiment: AMAT has a strong history of beating estimates and Wall Street expects earnings growth next week — this raises the chance of a positive surprise but also increases pre-report volatility. Applied Materials (AMAT) Reports Next Week: Wall Street Expects Earnings Growth
• Neutral Sentiment: Management visibility events: Applied will participate in investor conferences this week — useful for guidance clarity but unlikely to move the stock dramatically on their own. Applied Materials to Participate in Upcoming Investor Conferences
• Neutral Sentiment: Technicals: AMAT recently cleared its 20-day moving average, signaling short-term momentum, but technical strength can invite profit-taking after a large run. Applied Materials (AMAT) Just Overtook the 20-Day Moving Average
• Negative Sentiment: Valuation concerns: commentary highlights AMAT’s premium P/S multiple (~9.4x) after a strong YTD rally, which raises downside risk if growth expectations slip. Should You Buy, Sell or Hold AMAT Stock at a P/S Valuation of 9.39X?
• Negative Sentiment: Short-term profit-taking and pre-earnings jitters after a big run higher are likely drivers of today’s pullback despite the positive newsflow. 7 stocks expecting a post-earnings jolt — including Applied Materials and Cisco Systems

Analyst Upgrades and Downgrades

Several research analysts recently issued reports on AMAT shares. Summit Insights raised shares of Applied Materials from a “hold” rating to a “buy” rating in a report on Friday, February 13th. TD Cowen lifted their price objective on Applied Materials from $315.00 to $450.00 and gave the company a “buy” rating in a report on Friday, February 13th. Erste Group Bank upgraded Applied Materials from a “hold” rating to a “buy” rating in a research report on Monday, April 27th. Needham & Company LLC raised their price target on Applied Materials from $390.00 to $440.00 and gave the company a “buy” rating in a report on Friday, February 13th. Finally, Zacks Research downgraded Applied Materials from a “strong-buy” rating to a “hold” rating in a research note on Monday, April 27th. Twenty-seven investment analysts have rated the stock with a Buy rating and seven have issued a Hold rating to the stock. Based on data from MarketBeat.com, the company currently has an average rating of “Moderate Buy” and a consensus target price of $370.86.

Applied Materials Price Performance

The company has a 50-day simple moving average of $370.45 and a 200-day simple moving average of $309.88. The stock has a market cap of $326.04 billion, a PE ratio of 42.05, a PEG ratio of 1.83 and a beta of 1.66. The company has a debt-to-equity ratio of 0.30, a current ratio of 2.71 and a quick ratio of 1.94.

Applied Materials (NASDAQ:AMAT) last released its quarterly earnings data on Thursday, February 12th. The manufacturing equipment provider reported $2.38 earnings per share (EPS) for the quarter, topping the consensus estimate of $2.21 by $0.17. The firm had revenue of $7.01 billion during the quarter, compared to analysts’ expectations of $6.88 billion. Applied Materials had a return on equity of 37.52% and a net margin of 27.78%.Applied Materials’s revenue was down 2.1% compared to the same quarter last year. During the same quarter in the prior year, the business posted $2.38 earnings per share. Applied Materials has set its Q2 2026 guidance at 2.440-2.840 EPS. Sell-side analysts anticipate that Applied Materials, Inc. will post 11.14 EPS for the current fiscal year.

Applied Materials Increases Dividend

The company also recently declared a quarterly dividend, which will be paid on Thursday, June 11th. Stockholders of record on Thursday, May 21st will be given a $0.53 dividend. This is an increase from Applied Materials’s previous quarterly dividend of $0.46. This represents a $2.12 dividend on an annualized basis and a dividend yield of 0.5%. The ex-dividend date is Thursday, May 21st. Applied Materials’s dividend payout ratio (DPR) is 18.83%.

Insider Activity

In other news, CAO Adam Sanders sold 534 shares of the firm’s stock in a transaction on Tuesday, February 24th. The stock was sold at an average price of $379.16, for a total value of $202,471.44. Following the completion of the transaction, the chief accounting officer owned 4,625 shares in the company, valued at $1,753,615. This trade represents a 10.35% decrease in their ownership of the stock. The sale was disclosed in a filing with the SEC, which is available through the SEC website. Also, CFO Brice Hill sold 5,000 shares of the firm’s stock in a transaction on Tuesday, February 17th. The shares were sold at an average price of $361.21, for a total value of $1,806,050.00. Following the completion of the transaction, the chief financial officer owned 138,565 shares of the company’s stock, valued at approximately $50,051,063.65. This represents a 3.48% decrease in their position. The SEC filing for this sale provides additional information. Insiders sold a total of 12,003 shares of company stock worth $4,484,189 over the last 90 days. 0.30% of the stock is currently owned by corporate insiders.

Institutional Inflows and Outflows

A number of hedge funds have recently made changes to their positions in the company. Private Wealth Management Group LLC increased its position in shares of Applied Materials by 4.9% in the first quarter. Private Wealth Management Group LLC now owns 531 shares of the manufacturing equipment provider’s stock valued at $181,000 after buying an additional 25 shares in the last quarter. One Day In July LLC boosted its stake in shares of Applied Materials by 2.4% during the first quarter. One Day In July LLC now owns 1,089 shares of the manufacturing equipment provider’s stock valued at $372,000 after acquiring an additional 26 shares during the last quarter. Pinnacle Bancorp Inc. boosted its stake in shares of Applied Materials by 1.3% during the first quarter. Pinnacle Bancorp Inc. now owns 2,082 shares of the manufacturing equipment provider’s stock valued at $712,000 after acquiring an additional 27 shares during the last quarter. Horst & Graben Wealth Management LLC boosted its stake in shares of Applied Materials by 2.1% during the first quarter. Horst & Graben Wealth Management LLC now owns 1,304 shares of the manufacturing equipment provider’s stock valued at $446,000 after acquiring an additional 27 shares during the last quarter. Finally, Warther Private Wealth LLC boosted its stake in shares of Applied Materials by 1.5% during the fourth quarter. Warther Private Wealth LLC now owns 1,908 shares of the manufacturing equipment provider’s stock valued at $490,000 after acquiring an additional 28 shares during the last quarter. Hedge funds and other institutional investors own 80.56% of the company’s stock.

Applied Materials Company Profile

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.