Applied Materials, Inc.
Orin's own judgment of how firmly the evidence points one way — not the chance the price goes up.
Applied Materials is a buy as the company posts a decisive revenue inflection, with Q3 FY2026 revenue of $9.12B up 24.8% YoY (as of the quarter ended 26 Jul) after three quarters of accelerating growth from -2.1% to +11.4% to +24.8%.
The stock trades at a meaningful discount to semiconductor equipment peers at 43.4x PE versus a peer median of 58.1x and 35.0x EV/EBITDA versus 45.6x, while eight consecutive positive earnings surprises and a positive MACD histogram of +3.87 with price above both the 50-day and 200-day moving averages confirm fundamental and technical momentum. Persistent insider net selling of $147.2M over 24 months and a slightly negative smart money score of -0.02 as of Q2 2026 warrant monitoring but do not override the cyclical upturn driven by AI-related equipment demand.
What could go wrong
- Insider selling persistence. Insiders have net sold $147.2M in shares over 24 months with 45 dispositions versus 2 acquisitions, including recent sales by the CFO and CAO in October 2026.
- FCF margin compression. FY2025 FCF margin declined to 20.1% from 27.6% in FY2024 as capital expenditure nearly doubled from $1.19B to $2.26B, which could pressure shareholder returns if revenue growth stalls.
- Smart money outflows. Smart money score turned slightly negative at -0.02 as of Q2 2026, down from 0.08 in Q4 2025, suggesting institutional positioning is softening even as fund count rose to 78.
- Cyclicality of equipment demand. Semiconductor equipment demand is highly cyclical; the current AI-driven upcycle could reverse if chipmakers delay capacity expansion, as seen in the FY2025 net income decline of 2.5%.
What would change my mind
Where this comes from: results, quarter to 26 Jul · Q1–Q3 FY26 results · peer comparison · earnings vs estimates. Orin's read on AMAT; not advice.
How has the share price moved?
Up 71.2% over twelve months, from $231.33 on 27 Oct 2025 to $395.93 at the Tue 27 Oct 2026 close. Its highest close in that time was $723.00 on 30 Jun 2026; the last close is 45.2% below it.
- Green line: the closing price each trading day.
- Grey line: the average closing price over the last 50 trading days.
- Dashed amber line: the same over the last 200 trading days — a slower, smoother line.
- Bars along the bottom: shares traded each day — green when it closed higher than the day before, rose when lower (the most, 28.1M, on 26 Jun 2026).
- Flags: the company's filings, on the day they were made (a 10-Q is the quarterly report and a 10-K the annual report; an 8-K reports a major event).
- Rose flags: large share sales by the company's own officers and directors, from the Form 4 each one files after trading.
On file
All AMAT filingsLargest holders · 13F Q2 2026
Money flow| Filer | Position | Of fund |
|---|---|---|
| BlackRock | $58.0B | 0.9% |
| Vanguard Capital Management | $37.5B | 0.8% |
| State Street | $27.6B | 0.8% |
| Invesco | $20.4B | 1.6% |
| Capital Research Global Investors | $16.0B | 2.2% |
| Geode Capital Management | $15.9B | 0.8% |
| Vanguard Portfolio Management | $13.4B | 0.6% |
| Morgan Stanley | $9.8B | 0.5% |
| JPMorgan Chase | $9.6B | 0.5% |
| T. Rowe Price Associates | $9.1B | 0.9% |
200 of the 815 filers we track · quarter ended Q2 2026 · positions, not flows
Insiders, last 24 months: 107 Form 4 filings; open-market trades net −$147.2M. 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 →How is it priced, against its own past and its sector?
Priced at 33.9× its last 12 months of profit (Tue 27 Oct close) — higher than in all 5 of its last 5 fiscal years (middle 21.4×); the typical Technology company on the NASDAQ is at 46.1×.
| Measure | Now | Its usual | Sector |
|---|---|---|---|
| P/E | 33.9×above usual | 21.4× | 46.1× |
| P/S | 10.2×above usual | 5.50× | — |
| EV/EBITDA | 27.3×above usual | 17.3× | — |
| P/B | 12.3×above usual | 8.1× | — |
- "Its usual" is the middle of its own last 5 fiscal years.
P/E: the share price divided by one year of profit per share — roughly how many years of today's profit the price pays for. A company that loses money has no P/E.
P/S: the company's total market value divided by one year of revenue. Used when there is no profit to measure.
EV/EBITDA: the price of the whole company (its shares plus its debt, minus its cash) divided by one year of operating profit before interest, tax and write-downs.
P/B: the share price divided by the book value per share — what the company owns minus what it owes, as its accounts record it. When book value is tiny, P/B swings wildly and says little.
What do the analysts who cover it publish?
The analysts' average 12-month price target is $660 (from $530 to $900) — 67% above the Tue 27 Oct close price. That is their published opinion, not Orin's.
$660
$530 – $900 · +67% against the last close
- 25 buy or overweight
- 4 hold
- 0 underweight or sell
Price target: the share price an analyst publishes for about 12 months ahead. It is the opinion of the firm that wrote it; the average is across the firms that cover the company.
Overweight / underweight: analysts' rating words: overweight means the firm expects the stock to do better than the others it covers, underweight worse. Their words, not Orin's.
How is it priced next to the companies it is compared to?
Priced at 33.9× its last 12 months of profit; the middle P/E of the 7 companies it is compared to that made a profit is 42.0×.
| Company | Market value | P/E | EV/EBITDA | Gross margin | Net margin | ROE |
|---|---|---|---|---|---|---|
| AMATApplied Materials, Inc. | $314B | 33.9× | 27.3× | 49.4% | 30.1% | 40% |
| ACLSAxcelis Technologies, Inc. | $3B | 26.5× | 19.4× | 42.8% | 11.7% | 10% |
| ASMLASML Holding N.V. | $630B | 42.0× | 34.2× | 54.3% | 34.1% | 64% |
| FORMFormFactor, Inc. | $8B | 72.2× | 49.8× | 45.6% | 12.8% | 11% |
| KLACKLA Corporation | $201B | 41.7× | 33.9× | 61.3% | 35.6% | 85% |
| LRCXLam Research Corporation | $301B | 35.7× | 29.3× | 51.1% | 32.3% | 72% |
| ONTOOnto Innovation Inc. | $11B | 79.9× | 43.2× | 50.4% | 11.8% | 7% |
| VECOVeeco Instruments Inc. | $2B | 78.6× | 39.8× | 37.4% | 3.6% | 3% |
- The list of companies is the data vendor's choice, so it can include a company a person would not have picked.
Market value: the share price times the number of shares — what the whole company is priced at.
P/E: the share price divided by one year of profit per share — roughly how many years of today's profit the price pays for. A company that loses money has no P/E.
EV/EBITDA: the price of the whole company (its shares plus its debt, minus its cash) divided by one year of operating profit before interest, tax and write-downs.
Gross margin: the share of each $1 of sales left after the direct cost of making what was sold.
Net margin: the share of each $1 of sales kept as profit after every cost. Below zero, the company lost money.
ROE: return on equity: one year of profit as a share of the shareholders' money in the business (its book value).
Is it priced high or low compared with its own past?
Priced at 33.9× its last 12 months of profit (Tue 27 Oct close). It has no full fiscal year on file since its history starts, so there is nothing of its own to compare with.
- Now33.9×
P/E: the share price divided by one year of profit per share — roughly how many years of today's profit the price pays for. A company that loses money has no P/E.
Fiscal year (FY): the company's own 12-month accounting year, which need not match the calendar year.
How has its sector been priced?
Technology companies on the NASDAQ were priced at a typical 46.1× their yearly profit (Tue 27 Oct close).
- Now46.1×
- Each year is the middle of that calendar year's daily sector P/E; "Now" is the Tue 27 Oct close figure, the same one in the table above.
Sector P/E: the middle P/E of the companies in the same sector on the same stock exchange, as the data vendor works it out each day.
What does a cash-flow model say a share is worth?
A standard cash-flow model puts it at $153 a share — 61% below the $395.97 price it was computed against (27 Oct).
| Model | Value a share | Against the price then |
|---|---|---|
| Levered | $153 | 61% below $395.97 |
- Standard: comes out below zero, so it is not shown.
Discounted cash flow: a model's estimate of what the company is worth today, from the cash it is forecast to make in future years. Small changes in the forecast move it a lot, and it says little about a company that loses money.
Standard / levered: two versions of the cash-flow model: the standard one counts the cash before the company pays its lenders, the levered one after.