Applied Materials (NASDAQ:AMAT) Shares Down 2.5% – Should You Sell?

Applied Materials, Inc. (NASDAQ:AMAT)’s stock price was down 2.5% during mid-day trading on Thursday . The stock traded as low as $531.79 and last traded at $534.54. 11,418,062 shares were traded during trading, an increase of 39% from the average session volume of 8,217,843 shares. The stock had previously closed at $548.15.

Key Stories Impacting Applied Materials

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

• Positive Sentiment: Record quarterly performance: Fiscal Q3 revenue rose 24.8% year over year to $9.12 billion, ahead of the $8.99 billion consensus estimate, while adjusted EPS of $3.50 exceeded expectations. AI infrastructure demand, advanced packaging and memory spending supported growth. Applied Materials Q3 Earnings Beat Estimates, Revenues Rise Y/Y
• Positive Sentiment: Above-consensus outlook: Management projected fiscal Q4 revenue of approximately $9.8 billion to $10.8 billion and EPS of $3.82 to $4.22, both above analyst expectations. The company also pointed to stronger systems growth and unusually long customer visibility into fiscal 2027 and beyond. Applied Materials Forecasts Quarterly Revenue Above Estimates
• Positive Sentiment: Analyst and institutional support: JPMorgan, RBC, TD Cowen, B. Riley, Needham and other firms maintained positive ratings or raised price targets. Soros Capital also reportedly added AMAT among several semiconductor positions, reinforcing the longer-term AI and chip-cycle investment case. Soros Capital Loads Up on Semiconductor Stocks
• Neutral Sentiment: Options imply a possible rebound: Derivatives-market data indicates traders expect the pullback could be temporary, although elevated volatility reflects uncertainty over the stock’s near-term direction. Applied Materials Options Data
• Negative Sentiment: Expectations were exceptionally high: Despite the earnings beat and upbeat guidance, investors wanted faster growth and clearer evidence that AMAT is outpacing rivals in semiconductor manufacturing equipment. Concerns about competition, margins and the pace of systems growth overshadowed the headline results. Applied Materials Slips as Investors Seek Faster Growth
• Negative Sentiment: Broader market pressure added to selling: Weaker July retail-sales data, profit-taking after record highs and a semiconductor-sector selloff weighed on AMAT and other AI-related stocks.

Wall Street Analysts Forecast Growth

Several research firms have weighed in on AMAT. Barclays upped their price target on Applied Materials from $500.00 to $590.00 and gave the stock an “overweight” rating in a research note on Thursday, June 11th. Argus raised their target price on shares of Applied Materials from $420.00 to $500.00 and gave the company a “buy” rating in a research note on Tuesday, May 19th. Craig Hallum boosted their price target on shares of Applied Materials from $530.00 to $585.00 and gave the stock a “buy” rating in a research note on Friday. Bank of America reduced their target price on Applied Materials from $720.00 to $650.00 and set a “buy” rating on the stock in a report on Friday. Finally, Zacks Research raised Applied Materials from a “hold” rating to a “strong-buy” rating in a research note on Wednesday, July 1st. One analyst has rated the stock with a Strong Buy rating, twenty-seven have issued a Buy rating and six have issued a Hold rating to the company’s stock. Based on data from MarketBeat, the stock currently has an average rating of “Moderate Buy” and an average target price of $640.17.

Applied Materials Trading Down 5.1%

The stock has a market cap of $402.68 billion, a PE ratio of 43.72, a PEG ratio of 1.35 and a beta of 1.61. The company has a debt-to-equity ratio of 0.22, a quick ratio of 1.80 and a current ratio of 2.51. The stock has a fifty day moving average price of $564.15 and a 200 day moving average price of $444.89.

Applied Materials (NASDAQ:AMAT) last released its quarterly earnings results on Thursday, August 13th. The manufacturing equipment provider reported $3.50 earnings per share for the quarter, beating the consensus estimate of $3.40 by $0.10. The company had revenue of $9.12 billion for the quarter, compared to analyst estimates of $8.99 billion. Applied Materials had a return on equity of 39.58% and a net margin of 30.05%.Applied Materials’s quarterly revenue was up 24.8% compared to the same quarter last year. During the same quarter in the prior year, the firm posted $2.48 EPS. Applied Materials has set its Q4 2026 guidance at 3.820-4.220 EPS. Equities analysts expect that Applied Materials, Inc. will post 12.22 EPS for the current year.

Applied Materials Dividend Announcement

The company also recently announced 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. This represents a $2.12 annualized dividend and a dividend yield of 0.4%. The ex-dividend date is Thursday, August 20th. Applied Materials’s dividend payout ratio (DPR) is 19.91%.

Insider Activity

In other Applied Materials news, Director Thomas J. Iannotti sold 9,250 shares of the business’s stock in a transaction that occurred on 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 completion of the transaction, the director owned 40,559 shares in the company, valued at $24,326,071.43. The trade was a 18.57% decrease in their ownership of the stock. The sale was disclosed in a filing with the Securities & Exchange Commission, which is available at this link. Also, CEO Gary E. Dickerson sold 71,727 shares of the company’s stock in a transaction that occurred on Tuesday, June 16th. The shares were sold at an average price of $593.75, for a total value of $42,587,906.25. Following the transaction, the chief executive officer directly owned 1,695,164 shares in the company, valued at approximately $1,006,503,625. This represents a 4.06% decrease in their position. The SEC filing for this sale provides additional information. Insiders sold 278,088 shares of company stock worth $169,654,805 in the last 90 days. Company insiders own 0.30% of the company’s stock.

Hedge Funds Weigh In On Applied Materials

A number of large investors have recently bought and sold shares of the business. Cornerstone Financial Management LLC purchased a new position in Applied Materials in the 4th quarter worth about $25,000. Wilkerson Advisory Group LLC bought a new position in Applied Materials in the 4th quarter worth about $26,000. Harborfront Financial Group LLC bought a new position in Applied Materials in the 2nd quarter worth about $27,000. Financial Freedom LLC purchased a new position in shares of Applied Materials during the first quarter worth approximately $28,000. Finally, Joseph Group Capital Management bought a new stake in shares of Applied Materials during the fourth quarter valued at approximately $31,000. Hedge funds and other institutional investors 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.