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With a market cap of $184.9 billion, Applied Materials, Inc. (AMAT) operates in the semiconductor and display manufacturing equipment industry. Based in Santa Clara, California, the company provides manufacturing equipment, services, and software to optimize the performance and cost-efficiency of semiconductor chips and display technologies.
Companies valued at $10 billion or more are generally considered "large-cap" stocks, and Applied Materials fits this criterion perfectly, exceeding the mark. Applied Materials is the second largest supplier of semiconductor equipment in the world, generating significant revenue through its production of equipment, services, and software for semiconductor chips, flat panel displays, and coatings for various applications.
However, the semiconductor equipment maker has fallen marginally from its 52-week high of $225.07, achieved on May 23. Shares of AMAT are up 4.4% over the past three months, outperforming the broader SPDR NYSE Technology ETF’s (XNTK) 3.8% gains over the same time frame.
Longer term, AMAT is up 36.7% on a YTD basis, outpacing the XNTK’s 14.5% gains. Moreover, shares of Applied Materials have rallied 65.4% over the past 52 weeks, compared to XNTK’s gains of 40% over the same time frame.
AMAT has been trading above its 50-day moving average since November last year and has mostly remained above its 200-day moving average during this period despite some fluctuations, indicating a bullish price trend.
Applied Materials’ outperformance over the past year can be attributed to its robust financial performance, optimistic guidance, strategic investments in growth areas like artificial intelligence (AI) and the internet of things (IoT), along with effective market share expansion. Plus, the stock popped on June 5 after Barclays upgraded the company, citing increased orders for semiconductor manufacturing equipment in China and anticipated capital investment in the U.S. semiconductor industry.
However, despite stronger-than-expected Q2 earnings results on May 16, the stock dipped because its fiscal Q3 forecast did not meet the high expectations of investors who anticipated a more substantial beat and stronger outlook.
To emphasize the stock’s outperformance, top rival Lam Research Corp (LRCX) is underperforming AMAT. Shares of Lam Research have gained 56.7% over the past 52 weeks and are up 22.4% on a YTD basis.
Even though the stock's value has soared over the past 52 weeks, analysts are cautiously optimistic about its prospects. The stock has a consensus rating of "Moderate Buy" from the 32 analysts covering the stock, and the mean price target of $226.62 represents a premium of only 1.5% to current levels.
On the date of publication, Sohini Mondal did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. For more information please view the Barchart Disclosure Policy here.
