Applied Materials (NASDAQ:AMAT) Shares Down 3.2% – Should You Sell?

Applied Materials, Inc. (NASDAQ:AMAT)’s stock price fell 3.2% during mid-day trading on Monday . The company traded as low as $521.57 and last traded at $522.12. Approximately 6,967,291 shares traded hands during trading, a decline of 15% from the average session volume of 8,213,133 shares. The stock had previously closed at $539.14.

Key Headlines Impacting Applied Materials

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

• Positive Sentiment: Investors are focusing on the company’s role as a “picks-and-shovels” supplier to the AI-chip industry. Strong data-center investment and demand for advanced chips could support orders for Applied Materials’ deposition, etch and inspection equipment. Is Applied Materials the Picks-and-Shovels Play on AI Chips?
• Positive Sentiment: Analysts expect another strong quarter, with previews citing approximately $9 billion in revenue, up about 23% year over year, and adjusted earnings of roughly $3.39 per share. Expectations for record revenue are raising the potential for a positive surprise if AI-related demand and margins exceed forecasts. Applied Materials Earnings Preview
• Positive Sentiment: Applied Materials’ EPIC Center is expanding its semiconductor research network through a collaboration with UC Berkeley. The partnership could accelerate process innovation and commercialization, supporting the company’s longer-term competitive position. UC Berkeley to Join Applied Materials’ EPIC Center
• Neutral Sentiment: The stock has recovered strongly this year but remains well below its June peak, leaving Thursday’s results and management outlook as the next major catalyst. Options traders reportedly anticipate a substantial post-earnings move. Expected Post-Earnings Move
• Negative Sentiment: Valuation and competitive risks are limiting analyst enthusiasm. William Blair initiated coverage with a “market perform” rating, while another analyst maintained a Hold, citing strong AI fundamentals but less upside after the stock’s rally and elevated valuation. Analyst Maintains Hold on Applied Materials

Analyst Upgrades and Downgrades

AMAT has been the topic of several analyst reports. Wells Fargo & Company increased their target price on Applied Materials from $715.00 to $740.00 and gave the stock an “overweight” rating in a research report on Friday, June 26th. Needham & Company LLC upped their price target on shares of Applied Materials from $530.00 to $740.00 and gave the stock a “buy” rating in a research report on Friday, July 10th. Truist Financial set a $575.00 price objective on shares of Applied Materials in a report on Thursday, May 28th. B. Riley Financial lifted their price objective on shares of Applied Materials from $550.00 to $790.00 and gave the company a “buy” rating in a research report on Friday, June 26th. Finally, Argus upped their target price on shares of Applied Materials from $420.00 to $500.00 and gave the stock a “buy” rating in a research report on Tuesday, May 19th. One investment analyst has rated the stock with a Strong Buy rating, twenty-six have given a Buy rating and eight have given a Hold rating to the company. Based on data from MarketBeat, the company currently has a consensus rating of “Moderate Buy” and an average target price of $603.23.

Applied Materials Stock Performance

The company has a market cap of $435.97 billion, a P/E ratio of 51.56, a PEG ratio of 1.32 and a beta of 1.61. The company has a quick ratio of 1.80, a current ratio of 2.51 and a debt-to-equity ratio of 0.22. The company has a 50 day moving average price of $561.46 and a 200-day moving average price of $441.34.

Applied Materials (NASDAQ:AMAT) last issued its quarterly earnings data on Thursday, May 14th. The manufacturing equipment provider reported $2.86 earnings per share for the quarter, beating analysts’ consensus estimates of $2.68 by $0.18. The business had revenue of $7.91 billion for the quarter, compared to analysts’ expectations of $7.68 billion. Applied Materials had a net margin of 29.31% and a return on equity of 36.97%. The company’s revenue was up 11.4% on a year-over-year basis. During the same period in the previous year, the business earned $2.39 earnings per share. Applied Materials has set its Q3 2026 guidance at 3.160-3.560 EPS. Equities analysts expect that Applied Materials, Inc. will post 12.17 EPS for the current fiscal year.

Applied Materials Announces Dividend

The business also recently disclosed a quarterly dividend, which will be paid on Thursday, September 10th. Stockholders of record on Thursday, August 20th will be issued a $0.53 dividend. The ex-dividend date is Thursday, August 20th. This represents a $2.12 annualized dividend and a dividend yield of 0.4%. Applied Materials’s dividend payout ratio (DPR) is 19.91%.

Insider Buying and Selling at Applied Materials

In related news, CEO Gary E. Dickerson sold 71,727 shares of the business’s stock in a transaction that occurred on Tuesday, June 16th. The stock was sold at an average price of $593.75, for a total transaction of $42,587,906.25. Following the sale, the chief executive officer owned 1,695,164 shares of the company’s stock, valued at $1,006,503,625. The trade was a 4.06% decrease in their ownership of the stock. The sale was disclosed in a document filed with the Securities & Exchange Commission, which is available at the SEC website. Also, insider Prabu G. Raja sold 50,000 shares of the company’s stock in a transaction that occurred on Thursday, June 4th. The stock was sold at an average price of $505.28, for a total value of $25,264,000.00. Following the completion of the sale, the insider owned 356,642 shares of the company’s stock, valued at $180,204,069.76. This trade represents a 12.30% decrease in their ownership of the stock. The disclosure for this sale is available in the SEC filing. Over the last ninety days, insiders have sold 278,088 shares of company stock valued at $169,654,805. 0.30% of the stock is currently owned by company insiders.

Institutional Trading of Applied Materials

Several institutional investors have recently modified their holdings of AMAT. Brighton Jones LLC grew its stake in shares of Applied Materials by 28.0% in the 4th quarter. Brighton Jones LLC now owns 12,674 shares of the manufacturing equipment provider’s stock worth $2,061,000 after purchasing an additional 2,771 shares during the last quarter. Sivia Capital Partners LLC lifted its stake in Applied Materials by 26.7% during the second quarter. Sivia Capital Partners LLC now owns 3,225 shares of the manufacturing equipment provider’s stock valued at $590,000 after purchasing an additional 679 shares during the last quarter. Forefront Wealth Partners LLC bought a new stake in Applied Materials during the second quarter worth approximately $410,000. Schnieders Capital Management LLC. grew its position in Applied Materials by 30.1% in the second quarter. Schnieders Capital Management LLC. now owns 15,003 shares of the manufacturing equipment provider’s stock worth $2,747,000 after buying an additional 3,469 shares during the last quarter. Finally, Sei Investments Co. grew its position in Applied Materials by 59.3% in the second quarter. Sei Investments Co. now owns 422,694 shares of the manufacturing equipment provider’s stock worth $77,383,000 after buying an additional 157,426 shares during the last quarter. Institutional investors and hedge funds own 80.56% of the company’s stock.

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.