Applied Materials, Inc. AMAT
Applied Materials remains a hold after its sharp pullback from June highs near $736 to $496.17 as of 2026-08-19, which has improved the risk/reward but not decisively reset it. Smart money accumulation has accelerated sharply, with the institutional score rising to 0.6992 as of the quarter ended 2026-06-30 from 0.3922 the prior quarter, and EV/EBITDA at 34.6x now sits ~12% below the peer median of 39.4x.
However, FY2025 fundamentals show net income declining 2.5% to $7.0B even as revenue grew 4.4% to $28.4B, free cash flow fell to $5.7B from $7.5B as capex nearly doubled to $2.26B, insiders net sold $242M over 24 months, and the stock trades below its 50-day moving average of $560.86 with a negative MACD histogram — a technically broken picture that offsets the improving institutional and valuation setup.
What could go wrong
- Semiconductor cycle peak. Chip equipment stocks sold off 4–5% on 2026-08-19 amid concerns the AI capex cycle may be peaking, despite AMAT's reported 25% y/y Q3 revenue growth and record operating income per news coverage.
- Capex-driven FCF compression. FY2025 free cash flow fell to $5.7B from $7.5B in FY2024 as capital expenditure nearly doubled to $2.26B from $1.19B, shrinking FCF margin to 20.1% from 27.6%.
- Insider selling pressure. Insiders net sold $242M over 24 months with 67 dispositions vs. 34 acquisitions; the CEO and segment presidents sold shares in June 2026 at $633–736, well above the current $496 price.
- Valuation still elevated on absolute basis. P/E of 42.5x is ~5% above the peer median of 40.5x, and the stock remains ~26% above its 200-day moving average of $392.92, limiting downside protection if growth disappoints.
What would change my mind
Where this comes from: Technicals as of 2026-08-19 · FMP annual fundamentals FY2025 · 13F composite smart money as of 2026-06-30 · Peer relative valuation. Orin's read on AMAT; not advice.
Twelve months actual closes to 2026-09-23 · actual filings
50-day average 200-day average · volume below
On file
All AMAT filingsLargest holders · 13F Q2 2026
Money flow| Filer | Position | Of fund |
|---|---|---|
| Vanguard Capital Management | $37.5B | 0.8% of fund |
| State Street | $27.6B | 0.8% of fund |
| Invesco | $20.4B | 1.6% of fund |
| Capital Research Global Investors | $16.0B | 2.2% of fund |
| Geode Capital Management | $15.9B | 0.8% of fund |
| Vanguard Portfolio Management | $13.4B | 0.6% of fund |
198 filers · quarter ended Q2 2026 · positions, not flows
Insiders, last 24 months: 104 Form 4 filings, net −$245.9M. Of the 50 on hand, 0 were open-market purchases and 35 sales— the rest are grants, option exercises and tax withholding.
Ask Orin about AMAT
Orin answers questions about AMAT from its filings, transcripts and numbers — with the source behind every claim. Your own desk starts with 3 free days, card required.
Start 3 free days →Where it trades
| Metric | Now | Own median | Sector |
|---|---|---|---|
| P/E | 40.6× | 21.4× | 53.3× |
| EV/EBITDA | 33.1× | 17.3× | — |
| P/S | 12.21× | 5.50× | — |
| P/B | 14.7× | 8.1× | — |
Its P/E sits above all 5 of the last 5 years (+4.17σ from its own mean).
24.1%
free-cash-flow growth every year for 10 years, discounted at 10%, is what today’s price implies — starting from $5.7B of trailing free cash flow. It is an assumption the market is making, not a forecast Orin is making.
What Wall Street published
$666
$530 – $900 · +40% against today's price
- 43 buy or overweight
- 12 hold
- 0 underweight or sell
The analysts’ consensus and their own ratings, not Orin’s. A target is a twelve-month opinion published by the firm that wrote it.
Against the companies it is compared to
| Company | Market cap | P/E | EV/EBITDA | Gross | Net | ROE |
|---|---|---|---|---|---|---|
| AMATApplied Materials, Inc. | $377B | 40.6× | 33.1× | 49.4% | 30.1% | 40% |
| ARMArm Holdings plc American Depositary Shares | $355B | 342.8× | 256.8× | 95.3% | 20.2% | 13% |
| INTCIntel Corporation | $618B | — | 178.7× | 38.9% | -19.8% | -11% |
| INTUIntuit Inc. | $78B | 17.4× | 11.4× | 80.9% | 21.3% | 23% |
| KLACKLA Corporation | $245B | 51.0× | 43.4× | 61.3% | 35.6% | 85% |
| LRCXLam Research Corporation | $384B | 53.1× | 44.0× | 50.5% | 31.3% | 67% |
| MUMicron Technology, Inc. | $1.21T | 23.9× | 17.4× | 72.6% | 55.9% | 71% |
| NOWServiceNow, Inc. | $146B | 87.4× | 43.4× | 74.8% | 11.3% | 14% |
| QCOMQUALCOMM Incorporated | $207B | 22.5× | 16.2× | 54.2% | 21.0% | 37% |
| TXNTexas Instruments Incorporated | $249B | 41.2× | 28.5× | 58.3% | 31.1% | 36% |
The median is of the 8 peers listed above and nothing else — check it against the column. This company trades 11.9% below it. The peer set is the vendor’s, so a company can appear here that a person would not have chosen.
What it has traded at
What its sector has traded at
Two scales, drawn separately on purpose: a sector median and one company’s multiple are not the same number and putting them on one axis invites a comparison neither series supports.
Discounted cash flow
| Model | Fair value | Against | Computed |
|---|---|---|---|
| Standard DCF | $-345 | $499.63 · −169% | 2026-06-10 |
| Levered DCF | $156 | $499.63 · −69% | 2026-06-10 |
The vendor’s intrinsic-value models. Treat them as a low-growth anchor — for a fast grower the market routinely pays well above a DCF. These were computed against the price in the “against” column, not today’s.
Every estimate on one scale
The vertical rule is the current price. Ranges and point estimates are the backend’s, published as they were calculated; an arrow means the estimate sits beyond this scale, and its number is on the right.