Key Stats for Applied Materials Stock
- Price Change: +5.8%
- Current Price: ~$304
- Advanced Model Target: $321
Now Live: Discover how much upside your favorite stocks could have using TIKR’s new Valuation Model (It’s free)>>>
What Happened?
Shares of Applied Materials, Inc. (AMAT) climbed 5.8% to close near $304 on Friday, completing the “Equipment Trio” rally alongside peers KLA Corp and Lam Research.
The move reflects a consensus on Wall Street that the true bottleneck for AI isn’t the chip design, but the physical capacity to manufacture advanced GPUs at scale.
With major foundries like TSMC and Intel racing to build new fabs, Applied Materials is seeing an explosion in its order book for tools required for Gate-All-Around (GAA) nodes, the next generation of transistor architecture.
The company’s leadership in materials engineering allows it to serve every major chipmaker, effectively making it a “neutral arms dealer” in the AI wars.
Analysts at UBS hosted the CFO this week, where management reiterated that the transition to 2nm processes is a massive tailwind for their deposition and etch businesses.
While the stock has lagged slightly behind KLA’s explosive move, the rotation into “cyclical” semi-cap names suggests investors are positioning for a multi-year upcycle.
However, some caution is warranted as the stock approaches the $321 level, a key resistance point that aligns with the valuation model’s fair value estimate.
With the entire sector breaking out, the question is whether AMAT can expand its multiples to catch up with its higher-flying peers.
See analysts’ growth forecasts and price targets for Applied Materials stock (It’s free!) >>>
Is Applied Materials Undervalued Today?
Speaking at the UBS Global Technology Conference, CFO Brice Hill outlined the durability of their key franchises.
He stated: “We think that PVD is a multigenerational solution… It’s critical for low resistivity solutions… no change in our expectation for that franchise.”
This comment was crucial in dispelling rumors that Chinese competitors could displace Applied’s core PVD business.
Hill also provided a bullish outlook for the industry’s roadmap.
He noted: “You can picture transistors and basically up to 18 layers of copper interconnects… Those are built by our tools.”
The management team is confident that as chips become more vertical and complex (3D stacking), the intensity of Applied’s tools per wafer will continue to rise.
Read the full Applied Materials Transcript on TIKR to see the Technology Roadmap >>>
According to TIKR’s Advanced Valuation Model, the stock is fairly valued but still offers modest upside as it rides the momentum.
- Target Price: $320.93
- Current Price: ~$304
- Potential Upside: +5.6%
Valuation Model Deep Dive
The investment case for Applied Materials is one of stability and steady compounding rather than explosive, speculative growth.
The model suggests that the market has efficiently priced in the current leg of the cycle, leaving less room for error compared to other names.
- The Fair Value Gap: At $304, the stock is trading near its $321 target, implying 5.6% upside, which serves as a “base case” for conservative investors.
- The Growth Reality: The model forecasts a consistent 10.5% Revenue CAGR (historical 5-year), reflecting the mature but growing nature of the wafer fab equipment market.
- The Profitability Check: With Net Income Margins at 22.4%, Applied Materials generates reliable cash flow, supporting its dividend and buyback programs.
If Applied Materials can surprise to the upside on margins or secure larger-than-expected orders from the 2nm transition, the target could move significantly higher.
Conclusion: The steady hand in a volatile sector. With a 5.6% upside potential to $321, Applied Materials is a core holding for investors who want exposure to the AI chip boom with less volatility than the pure-play chipmakers.
See what stocks billionaire investors are buying so you can follow the smart money with TIKR.
How Much Upside Does Applied Materials Stock Have From Here?
With TIKR’s new Valuation Model tool, you can estimate a stock’s potential share price in under a minute.
All it takes is three simple inputs:
- Revenue Growth
- Operating Margins
- Exit P/E Multiple
If you’re not sure what to enter, TIKR automatically fills in each input using analysts’ consensus estimates, giving you a quick, reliable starting point.
From there, TIKR calculates the potential share price and total returns under Bull, Base, and Bear scenarios so you can quickly see whether a stock looks undervalued or overvalued.
See a stock’s true value in under 60 seconds (Free with TIKR) >>>
Looking for New Opportunities?
- See what stocks billionaire investors are buying so you can follow the smart money.
- Analyze stocks in as little as 5 minutes with TIKR’s all-in-one, easy-to-use platform.
- The more rocks you overturn… the more opportunities you’ll uncover. Search 100K+ global stocks, global top investor holdings, and more with TIKR.
Disclaimer:
Please note that the articles on TIKR are not intended to serve as investment or financial advice from TIKR or our content team, nor are they recommendations to buy or sell any stocks. We create our content based on TIKR Terminal’s investment data and analysts’ estimates. Our analysis might not include recent company news or important updates. TIKR has no position in any stocks mentioned. Thank you for reading, and happy investing!
