Business Description
Applied Materials, Inc. is a prominent provider of crucial manufacturing equipment, associated services, and software solutions. These offerings primarily cater to the semiconductor, display, and related high-technology industries. The company organizes its activities into three principal business segments: 1. Semiconductor Systems: This division is dedicated to the development, production, and sale of sophisticated manufacturing tools essential for fabricating semiconductor chips, also known as integrated circuits. Its comprehensive suite of technologies includes epitaxy, ion implantation, oxidation/nitridation, rapid thermal processing, physical vapor deposition, chemical vapor deposition, chemical mechanical planarization, electrochemical deposition, atomic layer deposition, etching, and selective deposition and removal processes, in addition to precision metrology and inspection instruments. 2. Applied Global Services: This segment delivers integrated solutions aimed at maximizing the performance and productivity of manufacturing facilities and their equipment. Its services encompass providing spare parts, system upgrades, maintenance support, refurbished older-generation equipment, and advanced factory automation software for semiconductor, display, and other product lines. 3. Display and Adjacent Markets: This unit focuses on supplying products for the creation of various display technologies. This includes manufacturing solutions for liquid crystal displays (LCDs), organic light-emitting diodes (OLEDs), and other display types, which are integral to a broad spectrum of consumer electronics such as televisions, computer monitors, laptops, personal computers, electronic tablets, and smartphones. Founded in 1967, Applied Materials, Inc. maintains its corporate headquarters in Santa Clara, California. The company boasts a significant international presence, conducting operations across the United States, China, Korea, Taiwan, Japan, Southeast Asia, and Europe.
Business History
Generated: Jun 23, 2026 3:02amPrice Overview
Last updated: Jun 23, 2026 3:00am (4d ago)Price History (1 Year)
Revenue & Net Income Trend
| Period | Revenue | Net Income | Net Margin | YoY/QoQ |
|---|
Key Metrics
EPS (Diluted): 8.71
Total Equity: $20.42B
Shares: 808,000,000
Total Debt: $6.56B
Cash: $7.24B
EBITDA: $9.65B
Total Debt: $6.56B
Cash: $7.24B
Revenue: $28.37B
Revenue: $28.37B
Revenue: $28.37B
Total Equity: $20.42B
Tax Rate: 24.5%
Equity: $20.42B
Total Debt: $6.56B
Cash: $7.24B
Current Liabilities: $8.00B
Long-Term Debt: $6.46B
Total Debt: $6.56B
Total Equity: $20.42B
Shares: 808,000,000
Shares: 808,000,000
CapEx: -$2.26B
Shares: 808,000,000
Stock Price: $640.18
Net Income: $7.00B
Industry Benchmarks
Advanced Analysis Forensic deep-dive · three lenses
AMAT is a structurally advantaged business: revenue grew from $23.1B (2021) to $28.4B (2025), gross margin expanded from 47.3% to 48.7%, and operating margin held near 29% through a cyclical semi capex environment. Net income rose from $5.89B to $7.00B while diluted share count shrank from 919M to 808M (about -3.2% CAGR), so per-share earnings power compounds faster than headline growth. Buybacks exceeded SBC by 837%, meaning management is a genuine net buyer, not a dilution machine. Earnings integrity is excellent: OCF/NI of 1.07x, accruals at -1.4% of assets, Beneish M of -2.18, and an Altman Z of 23.29 all point to clean, cash-backed earnings. Liquidity is ample with $8.57B cash, $2.02B net cash, and $5.70B FCF in 2025 (down from $7.49B in 2024 - worth watching but still robust). The franchise is self-funding with no reliance on capital markets. The only soft spots: FCF dipped roughly 24% year-over-year in 2025 despite revenue growth, suggesting working-capital build or capex step-up; and net income ticked down slightly off 2024's peak. Insider tape is all sales (39 sells, 0 buys, $120.7M) including the CEO, but this is typical 10b5-1 behavior for a mature large-cap and not a quality red flag on its own.
Verify before trusting this (6)
- Cause of 2025 FCF drop ($7.49B to $5.70B) - inventory/receivables build, capex step-up, or one-time items in cash flow statement
- Customer concentration disclosure in 10-K (TSMC, Samsung, Intel exposure) and China revenue mix given export-control risk
- Segment detail on Applied Global Services vs Semiconductor Systems - services recurring-revenue mix supports durability thesis
- Whether insider sales are pre-arranged 10b5-1 plans versus discretionary
- R&D intensity trend and any capitalized-software accounting that could flatter operating income
- Backlog and bookings trajectory to confirm the 2025 revenue/margin expansion is not a peak
Price is $640.18 against an e2e composite FV of $127.25 and signal-adjusted FV of $123.45 - implying ~80% downside if you take those models straight. I do not. A 5x gap usually means one or more methods are runaway: the EPV floor at $69.52 is a no-growth liquidation-ish read that is clearly too punitive for a Fortress-grade franchise with secular tailwinds, and the anchored-PE at $217 is the only method that even pretends to value future growth - and it still sits at one-third of the current price. DCF at $111 is the most balanced of the three and it is also far below today's quote.
Verify before trusting this (5)
- FY26 capex guidance from major foundry customers (TSMC, Samsung, Intel)
- AMAT's own services revenue mix and growth - the recurring piece supporting any premium multiple
- China revenue exposure and export-license trajectory
- Whether the 2025 FCF dip is working-capital timing or a structural capex step-up
- Backlog and book-to-bill in leading-edge vs trailing-edge segments
AMAT is riding a strong, medium-cult platform-monopoly narrative tied to the AI-chip capex supercycle. News flow is overtly bullish (target hikes, EssilorLuxottica deal, 'dot-com peak valuation justified by AI' framing), and the active story is doing the heavy lifting - buyers are pricing a 10-15 year structural tailwind, not current cash flow. That is textbook positive sentiment pressure, regardless of whether the fundamentals support it. The neutral-to-mildly-positive macro tape (VIX 16.8, S&P near highs) is not fighting the move, though AMAT's 1.67 beta means any risk-off lurch would hit it hard. Analyst tone is the one clear divergence: consensus Buy but target $542 sits ~15% BELOW the $640 spot, and only 7 modest revisions this month - the sell-side has not chased the rally. That is a latent headwind if momentum stalls, because price is leaning on narrative alone with analysts visibly uncomfortable. Net: the live narrative and news flow are a clear tailwind right now; the macro and analyst-target gap are background risks, not active pressure.
Verify before trusting this (4)
- Whether analyst targets get revised up toward spot in next 2-4 weeks (confirms narrative) or stay stuck (latent downgrade risk)
- Any TSMC/Samsung/Intel capex guidance shift - the single biggest narrative crack point
- China export-control headlines - easing would gut the 'geopolitical chokepoint' premium
- VIX break above 20 or sector rotation out of semis - would hit this beta hard
Deep Analysis
Pre-flight intelligence scans the company first, then routes to the right analytical methods.
Income Statement (Annual)
Last updated: Jun 23, 2026 3:02am (4d ago)| Metric | 2021 | 2022 | 2023 | 2024 | 2025 |
|---|---|---|---|---|---|
| Revenue | $23.1B | $25.8B | $26.5B | $27.2B | $28.4B |
| Cost of Revenue | $12.1B | $13.8B | $14.1B | $14.3B | $14.6B |
| Gross Profit | $10.9B | $12.0B | $12.4B | $12.9B | $13.8B |
| Operating Expenses | $4.0B | $4.2B | $4.7B | $5.0B | $5.5B |
| Operating Income | $6.9B | $7.8B | $7.7B | $7.9B | $8.3B |
| Net Income | $5.9B | $6.5B | $6.9B | $7.2B | $7.0B |
| EBITDA | $7.4B | $8.3B | $8.5B | $8.8B | $9.7B |
| EPS | $6.47 | $7.49 | $8.16 | $8.68 | $8.71 |
| EPS (Diluted) | — | — | — | — | — |
Balance Sheet (Annual)
Last updated: Jun 23, 2026 3:00am (4d ago)| Metric | 2021 | 2022 | 2023 | 2024 | 2025 |
|---|---|---|---|---|---|
| Cash & Equivalents | $5.0B | $2.0B | $6.1B | $8.0B | $7.2B |
| Total Current Assets | $16.1B | $15.9B | $19.1B | $21.2B | $20.9B |
| Total Assets | $25.8B | $26.7B | $30.7B | $34.4B | $36.3B |
| Current Liabilities | $6.3B | $7.4B | $7.4B | $8.5B | $8.0B |
| Long-Term Debt | $5.5B | $5.5B | $5.5B | $5.5B | $6.5B |
| Total Liabilities | $13.6B | $14.5B | $14.4B | $15.4B | $15.9B |
| Total Equity | $12.2B | $12.2B | $16.3B | $19.0B | $20.4B |
| Retained Earnings | $32.2B | $37.9B | $43.7B | $49.7B | $55.2B |
Cash Flow (Annual)
Last updated: Jun 22, 2026 3:04am (5d ago)| Metric | 2021 | 2022 | 2023 | 2024 | 2025 |
|---|---|---|---|---|---|
| Operating Cash Flow | $5.4B | $5.4B | $8.7B | $8.7B | $8.0B |
| Capital Expenditure | -$668.0M | -$787.0M | -$1.1B | -$1.2B | -$2.3B |
| Free Cash Flow | $4.8B | $4.6B | $7.6B | $7.5B | $5.7B |
| Acquisitions (net) | -$12.0M | -$441.0M | -$25.0M | $0 | $4.0M |
| Debt Repayment | — | — | — | — | — |
| Dividends Paid | — | — | — | — | — |
| Stock Buybacks | -$3.8B | -$6.1B | -$2.2B | -$3.8B | -$4.9B |
| Net Change in Cash | -$365.0M | -$3.0B | $4.1B | $1.9B | -$781.0M |
Analyst Estimates (Annual)
Last updated: Jun 23, 2026 3:00am (4d ago)| Metric | 2026 | 2027 | 2028 | 2029 |
|---|---|---|---|---|
| Revenue |
$33.4B $33.0B – $33.8B
|
$42.3B $37.0B – $44.6B
|
$49.5B $49.2B – $49.8B
|
$53.2B $48.9B – $56.0B
|
| EBITDA |
$12.0B $11.9B – $12.2B
|
$15.3B $13.3B – $16.1B
|
$17.9B $17.8B – $18.0B
|
$19.2B $17.6B – $20.2B
|
| Net Income |
$9.8B $9.4B – $10.1B
|
$13.0B $10.4B – $14.3B
|
$15.6B $11.8B – $21.3B
|
$17.7B $15.8B – $18.9B
|
| EPS | — | — | — | — |
Growth Trends (YoY %)
Last updated: Jun 23, 2026 3:02am (4d ago)| Metric | 2022 | 2023 | 2024 | 2025 |
|---|---|---|---|---|
| Revenue Growth | +11.8% | +2.8% | +2.5% | +4.4% |
| Gross Profit Growth | +9.9% | +3.3% | +4.1% | +7.1% |
| Operating Income Growth | +13.0% | -1.7% | +2.8% | +5.4% |
| Net Income Growth | +10.8% | +5.1% | +4.7% | -2.5% |
| EBITDA Growth | +11.8% | +2.4% | +4.0% | +9.8% |
Insider Trading (Recent)
Last updated: Jun 23, 2026 3:02am (4d ago)All SEC Form 4 codes
- P Purchase
- Open-market or private purchase of shares.
- S Sale
- Open-market or private sale of shares.
- A Award / grant
- Grant or award of securities (RSUs, options, etc.) under Rule 16b-3.
- D Return to issuer
- Securities disposed back to the company under Rule 16b-3.
- F In-kind (tax)
- Shares withheld or delivered to pay the option-exercise price or tax — not an open-market sale.
- I Discretionary
- Discretionary transaction under an employee plan — Rule 16b-3(f).
- M Option exercise
- Exercise or conversion of a derivative (option/RSU) into shares — exempt.
- C Conversion
- Conversion of a derivative security into the underlying shares.
- E Short expiration
- Expiration of a short derivative position.
- H Long expiration
- Expiration or cancellation of a long derivative position with value received.
- O OTM exercise
- Exercise of an out-of-the-money derivative.
- X ITM exercise
- Exercise of an in-the-money or at-the-money derivative.
- G Gift
- Bona fide gift of securities.
- L Small acquisition
- Small acquisition under Rule 16a-6.
- W Inheritance
- Acquisition or disposition by will or the laws of descent.
- Z Voting trust
- Deposit into or withdrawal from a voting trust.
- J Other
- Other acquisition or disposition (explained in a Form 4 footnote).
- K Equity swap
- Transaction in an equity swap or similar instrument.
- U Tender / buyout
- Disposition via tender of shares in a change-of-control transaction.
Compensation-plan codes (A, D, F, M) are routine and rarely directional. Open-market P (buy) and S (sale) carry the most signal.
| Date | Insider | Type | Shares | Price | Value |
|---|---|---|---|---|---|
| 2026-06-18 | Raja Prabu G. | S-Sale | 10,000.00 | $633.53 | $6.3M |
| 2026-06-16 | Iannotti Thomas J | S-Sale | 9,250.00 | $599.77 | $5.5M |
| 2026-06-16 | Iannotti Thomas J | G-Gift | 750.00 | $0.00 | $0 |
| 2026-06-15 | Nalamasu Omkaram | S-Sale | 6,938.00 | $590.20 | $4.1M |
| 2026-06-15 | Nalamasu Omkaram | S-Sale | 3,799.00 | $595.14 | $2.3M |
| 2026-06-16 | Nalamasu Omkaram | S-Sale | 3,515.00 | $590.48 | $2.1M |
| 2026-06-16 | Nalamasu Omkaram | S-Sale | 4,782.00 | $591.53 | $2.8M |
| 2026-06-16 | Nalamasu Omkaram | S-Sale | 2,412.00 | $592.40 | $1.4M |
| 2026-06-16 | Nalamasu Omkaram | S-Sale | 4,726.00 | $593.58 | $2.8M |
| 2026-06-16 | Nalamasu Omkaram | S-Sale | 1,125.00 | $594.85 | $669,206 |
| 2026-06-16 | Nalamasu Omkaram | S-Sale | 4,028.00 | $595.50 | $2.4M |
| 2026-06-16 | Nalamasu Omkaram | S-Sale | 3,675.00 | $596.52 | $2.2M |
| 2026-06-15 | DICKERSON GARY E | S-Sale | 11,273.00 | $590.03 | $6.7M |
| 2026-06-16 | DICKERSON GARY E | S-Sale | 15,755.00 | $590.52 | $9.3M |
| 2026-06-16 | DICKERSON GARY E | S-Sale | 9,186.00 | $591.40 | $5.4M |
| 2026-06-16 | DICKERSON GARY E | S-Sale | 10,411.00 | $592.18 | $6.2M |
| 2026-06-16 | DICKERSON GARY E | S-Sale | 4,682.00 | $593.51 | $2.8M |
| 2026-06-16 | DICKERSON GARY E | S-Sale | 4,535.00 | $594.74 | $2.7M |
| 2026-06-16 | DICKERSON GARY E | S-Sale | 5,933.00 | $595.59 | $3.5M |
| 2026-06-16 | DICKERSON GARY E | S-Sale | 13,505.00 | $596.82 | $8.1M |
Dividend History (Last 20)
Last updated: Jun 20, 2026 11:53am (6d ago)| Date | Dividend | Declaration | Record | Payment |
|---|---|---|---|---|
| 2026-08-20 | $0.53 | 2026-06-09 | 2026-08-20 | 2026-09-10 |
| 2026-05-21 | $0.53 | 2026-03-12 | 2026-05-21 | 2026-06-11 |
| 2026-02-19 | $0.46 | 2025-12-11 | 2026-02-19 | 2026-03-12 |
| 2025-11-20 | $0.46 | 2025-09-11 | 2025-11-20 | 2025-12-11 |
| 2025-08-21 | $0.46 | 2025-06-10 | 2025-08-21 | 2025-09-11 |
| 2025-05-22 | $0.46 | 2025-03-10 | 2025-05-22 | 2025-06-12 |
| 2025-02-20 | $0.40 | 2024-12-13 | 2025-02-20 | 2025-03-13 |
| 2024-11-21 | $0.40 | 2024-09-12 | 2024-11-21 | 2024-12-12 |
| 2024-08-22 | $0.40 | 2024-06-13 | 2024-08-22 | 2024-09-12 |
| 2024-05-22 | $0.40 | 2024-03-08 | 2024-05-23 | 2024-06-13 |
| 2024-02-21 | $0.32 | 2023-12-07 | 2024-02-22 | 2024-03-14 |
| 2023-11-22 | $0.32 | 2023-09-07 | 2023-11-24 | 2023-12-14 |
| 2023-08-23 | $0.32 | 2023-06-08 | 2023-08-24 | 2023-09-14 |
| 2023-05-24 | $0.32 | 2023-03-13 | 2023-05-25 | 2023-06-15 |
| 2023-02-22 | $0.26 | 2022-12-12 | 2023-02-23 | 2023-03-16 |
| 2022-11-23 | $0.26 | 2022-09-08 | 2022-11-25 | 2022-12-15 |
| 2022-08-24 | $0.26 | 2022-06-09 | 2022-08-25 | 2022-09-15 |
| 2022-05-25 | $0.26 | 2022-03-11 | 2022-05-26 | 2022-06-16 |
| 2022-02-22 | $0.24 | 2021-12-02 | 2022-02-23 | 2022-03-16 |
| 2021-11-24 | $0.24 | 2021-09-02 | 2021-11-26 | 2021-12-16 |
Narrative Economics
market-narrative step).
Delvantic AI Findings
The numbers tell a more bullish story than several of the prior models acknowledge. Quarterly revenue went from $6.78B (Jul-2024) to $7.91B (Apr-2026), and net income ramped from $1.71B to $2.81B over the same window — the latest quarter at 35.5% net margin is a step-change, not a continuation of trend. Annualizing the last two quarters ($14.92B H1 → ~$30B+ run-rate) puts FY26 revenue roughly 6-8% above FY25's $28.37B, with net income tracking toward $9-10B versus FY25's $7.0B. That's not a "mature earner growing 1%" — the earnings_cagr of 1% is a backward-looking artifact dragged down by the noisy Jan-2025 quarter ($1.19B NI, 16.5% margin, likely a China export-control charge or tax item). Strip that and the trajectory is clearly accelerating.
The Valuation Synthesis claim of $127 fair value (-80% downside) is almost certainly broken. At $640 and ~$9B forward NI, the forward P/E is ~56 on the headline market cap of $508B — but the market cap implies ~794M shares, and AMAT's actual share count is closer to 800M, so that math roughly checks. EV/EBITDA of 45x and trailing P/E of 60x are genuinely rich for a cyclical, but a $127 DCF would imply the market is mispricing by 5x, which would require a near-term collapse in WFE spending of 60%+. Nothing in the quarterly cadence supports that. Either the DCF is using draconian terminal assumptions or an inappropriate cyclical-trough normalization. I'd anchor fair value at 25-30x normalized earnings of ~$8.5B = $210-255B EV, or roughly $270-320/share — rich-but-not-absurd downside of 50-60%, not 80%.
The Market Forces "losing competitive battle / deteriorating cash flows" signal contradicts the raw data: OCF $7.96B and FCF $5.70B in FY25 are healthy, and revenue YoY accelerated to +4.4% with margin expansion. The fcf_cagr of -13.4% likely reflects working-capital timing and elevated capex for capacity, not structural decay — gross margin held at 48.7% and operating margin at 29.2%. Insider selling is real (10 sales in mid-June 2026, zero buys) but at $640 near all-time highs after a massive run, programmatic 10b5-1 selling by executives is the rational baseline; calling it "unanimous structural signal" overreads it. The Narrative layer's framing — that this is an AI-capex mega-cycle bet, not a meme — is the most honest model output here.
The contrarian case I'd actually take seriously isn't the $127 DCF. It's that WFE is notoriously cyclical: 2018 peak was followed by a 20% revenue drawdown, and 2022's peak by another. AMAT's last-twelve-months revenue ($29B) is ~26% above the 2021 base, and the Apr-2026 quarter run-rate ($31.6B annualized) likely represents a cycle peak being extrapolated as a new plateau. If China demand (currently ~30-40% of revenue and exposed to escalating export controls) compresses, and memory capex resets, $9B forward NI could revert to $6.5B within 18 months — putting the stock on 78x trough earnings. That's the real risk, and it's masked by the accelerating quarterly print. I dissent from the synthesis verdict (overvalued by 80%) as numerically unsupported, but I agree with the directional call: this is expensive. Fair value sits around $300-350 on normalized through-cycle earnings with a premium for the genuine oligopoly position alongside ASML, LRCX, and TEL. At $640 the market is paying ~2x that for narrative — durable narrative, per the Narrative layer, but brittle to any capex guide-down from TSMC or Samsung. I'd be a seller into strength, not a short, and a buyer only sub-$400.
GPT Critique
In examining the raw data for Applied Materials, Inc. (AMAT), several key financial trends emerge. The company has demonstrated a strong upward trajectory in both revenue and net income over recent quarters, with revenue climbing from $6.78 billion in July 2024 to $7.91 billion in April 2026, and net income improving from $1.71 billion to $2.81 billion in the same period. Notably, the net margin has surged to 35.5% in the latest quarter, reflecting enhanced profitability. However, while annual revenue growth appears modest at 6.4% from 2022 to 2025, the company's quarterly performance suggests a potential acceleration in growth that may not be fully captured in trailing annual metrics. The balance sheet shows a solid cash position of $7.24 billion, and cash flow metrics indicate robust operating cash flows but also significant capital expenditures, suggesting ongoing investments in growth.
I agree with Opus's assertion that the $127 fair value posited by the Valuation Synthesis is excessively bearish. The synthesis's projection of an 80% downside seems disconnected from the company's demonstrated financial performance and strategic position in the semiconductor equipment market. Opus correctly highlights that the valuation assumes an extreme contraction in WFE spending, which is not substantiated by the latest financial data showing revenue growth and margin expansion. Additionally, I concur with the analysis that insider selling is not necessarily indicative of structural issues, as it aligns with rational financial behavior given the stock's recent highs.
However, I diverge from Opus's conclusion that fair value lies between $300-350. While Opus justifies this range by anchoring on a 25-30x normalized earnings multiple, I believe this overlooks the potential for sustained elevated capital expenditures driven by AI and advanced packaging demand. The narrative of AMAT as a "platform-monopoly" with structural pricing power supports a higher valuation multiple than typical cyclical companies. Hence, I would argue for a fair value closer to $400, reflecting both the cyclical risks and the structural tailwinds.
A skeptic might argue that the impressive recent quarter is a peak rather than a new baseline, citing historical cyclicality in semiconductor capital equipment spending. They might also question the sustainability of margins at 35.5%, given potential geopolitical risks and fluctuations in global semiconductor demand, particularly if Chinese export controls intensify or memory capex resets.