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Santa Clara, California-based Applied Materials, Inc. (AMAT) provides manufacturing equipment, services, and software to the semiconductor, display, and related industries. Valued at $150.60 billion by market cap, AMAT is the world’s largest semiconductor fabrication equipment supplier, and its customers include semiconductor wafer and integrated circuit manufacturers, flat panel liquid crystal displays, solar photovoltaic cells and modules, and other electronic devices manufacturers.
Shares of this leading semiconductor and display equipment manufacturer have outperformed the broader market considerably over the past year. AMAT has gained 26.6% over this time frame, while the broader S&P 500 Index ($SPX) has rallied nearly 17.3%. In 2024, AMAT stock is up 13.8%, surpassing the SPX’s 10.1% rise on a YTD basis.
Zooming in further, AMAT has outperformed the S&P 500 Technology Sector SPDR’s (XLK). The exchange-traded fund has gained about 17.8% over the past year. Moreover, AMAT’s double-digit returns on a YTD basis outshine the ETF’s 4.7% returns over the same time frame.
On Jul. 17, AMAT shares closed down more than 10% after Bloomberg reported that the Biden administration had told allies that it would consider using severe trade restrictions if companies continued to give China access to advanced chip technology.
On Jun. 5, AMAT shares closed up more than 5% after Barclays PLC (BCS) upgraded the stock to “Equal Weight” from “Underweight.”
On May 16, AMAT shares closed down more than 1% after reporting its Q2 results. Its adjusted EPS of $2.09 exceeded Wall Street expectations of $1.97. The company’s revenue was $6.65 billion, topping Wall Street forecasts of $6.51 billion. It generated $1.39 billion from cash from operations. For Q3, AMAT expects its adjusted EPS to be between $1.83 and $2.19. The company expects its Q3 revenue to be $6.65 billion, above analyst expectations of $6.58 billion.
For the current fiscal year, ending in October, analysts expect AMAT’s EPS to grow 3.2% to $8.31 on a diluted basis. The company’s earnings surprise history is impressive. It beat the consensus estimate in each of the last four quarters.
Among the 32 analysts covering AMAT stock, the consensus rating is a “Moderate Buy.” That’s based on 19 “Strong Buy” ratings, two “Moderate Buys,” and 11 “Holds.”
This configuration is less bullish than three months ago, with 20 suggesting a “Strong Buy.”
Recently, Deutsche Numis analyst Melissa Weathers maintained a “Hold” rating on AMAT stock with a price target of $260, implying a potential upside of 42.9% from current levels.
The mean price target of $239.72 represents a 31.8% premium to AMAT’s current price levels. The Street-high price target of $300 suggests an ambitious upside potential of 64.9%.
On the date of publication, Neha Panjwani 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.
