Applied Materials, Inc. (AMAT), with a market cap of $179.3 billion, operates in the semiconductor and display manufacturing equipment industry. Based in Santa Clara, the company provides manufacturing equipment, services, and software to optimize the performance and cost-efficiency of semiconductor chips and display technologies.
Shares of the semiconductor equipment maker have significantly outperformed the broader market over the past 52 weeks. AMAT has gained 59.2% over this time frame, while the broader S&P 500 Index ($SPX) has rallied 24.5%. In 2024 alone, shares of AMAT are up 33.6%, compared to SPX's 9.8% gains on a YTD basis.
Zooming in further, AMAT is also outpacing the Nasdaq Semiconductor ETF's (FTXL) 40.8% gains over the past 52 weeks.
Applied Materials has outperformed the broader markets due to its strong financial results, robust guidance, strategic investments in growing segments like artificial intelligence (AI), internet of things (IoT), trailing edge nodes, and effective market share gains. 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.
For the current fiscal year, ending in October, analysts expect AMAT's EPS to grow by 3.4% to $8.32. The company's earnings surprise history is promising. It beat the consensus estimates in each of the last four quarters.
Among the 32 analysts covering the stock, the consensus rating is a “Moderate Buy.” That’s based on 19 “Strong Buy” ratings, two “Moderate Buys,” 10 “Holds,” and one “Strong Sell.”
This configuration is slightly less bullish than a month before, with 20 analysts suggesting a "Strong Buy."
On May 20, Argus analyst James Kelleher, impressed by the company's fiscal Q2 results and guidance, raised the price target for Applied Materials to $260 – the Street-high price target. That implies a potential upside of 20.1% from the current price levels.
The mean price target of $222.86 represents a premium of just 2.9% to AMAT's 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.
