Key Takeaways
- Brad Gerstner’s Altimeter Capital opened a $189 million position in Applied Materials in the second quarter, while Maverick Capital, a $16 billion hedge fund, sold 99.7% of its stake.
- Applied Materials has fallen 54% since June 30, the holdings date covered by both funds’ latest 13Fs, and now sits 3% below its March 31 close.
- The stock trades at 19x forward earnings, under its 21x five-year average, while the fiscal 2027 EPS estimate has risen 13% since June.
- Gerstner has the better case from here. Applied’s Nov. 12 report and both funds’ next 13Fs, due by Nov. 16, are the next tests.
Two big funds took opposite sides of Applied Materials (AMAT) in the second quarter. Brad Gerstner’s Altimeter Capital bought it, along with Lam Research (LRCX) and KLA (KLAC). Lee Ainslie’s Maverick Capital sold nearly all of its stake. Since then, Applied stock has been cut in half.
One Fund In, One Fund Out
Altimeter opened a new position in Applied, according to its 13F for the quarter ended June 30, filed Aug. 14. It held 261,950 shares worth $189 million, 1.9% of its 13F stocks and its 14th-largest of 20 positions. It opened Lam ($171 million) and KLA ($175 million) the same quarter, so this is a bet on chip equipment, not on Applied alone.
Maverick, which manages $15.85 billion, went the other way. Applied was 3.4% of its 13F stocks at the end of March. Its June 13F shows only 2,468 shares left, worth $2 million.
Both filings show holdings from more than four months ago, and neither shows when a fund traded or what it paid.
AMAT Stock Halved While the Business Sped Up
Applied closed at $332.71 on Nov. 6, 54% below its June 30 close of $723, its highest close of the past year. The Oct. 13 investor event set a 2030 target of a 54% non-GAAP gross margin but gave no forecast for the equipment market. Then a chip-stock rout deepened after the midterms.
The business hasn’t slowed. Third-quarter revenue rose 25% to $9.1 billion, and management guided fourth-quarter revenue to $10.25 billion, plus or minus $500 million, up 51%. Non-GAAP gross margin reached 50.4%, the 13th straight quarter of year-over-year gains.
Analysts expect normalized EPS to nearly double from $9.42 in fiscal 2025 to $18.56 in fiscal 2027, then reach $23.89 in fiscal 2028:
At the end of June, that fiscal 2027 estimate was $16.40.
So investors now pay far less for bigger expected earnings. Applied traded at 49x forward earnings on June 30, its five-year high. Today it’s at 19x, below its 21x five-year average:
TIKR Tracks 41 Analysts on Applied Materials. How Many Say “Buy”?
See the full breakdown of Buy, Hold, and Sell ratings on Applied Materials, along with Wall Street’s revenue and earnings estimates, all in one place. More than 500,000 investors use TIKR to research stocks like this one. See Applied Materials’ Analyst Ratings
Gerstner Has the Better Case on Applied
Maverick has been right on price so far. Applied now trades 3% below its March 31 close of $341.79, so the stock has given back its entire second-quarter run. If Altimeter still holds every share, its $189 million stake is worth about $87 million.
Analysts haven’t followed the stock down. Their consensus target has nearly tripled over the past year, from $222 to $628:
Even the lowest target, $358, sits above the Nov. 6 close.
The risk is the cycle. Equipment booms end when customers pause to absorb what they’ve bought, and two customers supplied 34% of Applied’s revenue in the first nine months of fiscal 2026. In October 2022, the stock fell to 9.6x forward earnings.
I’d still take Gerstner’s side. At 19x, investors pay less than Applied’s usual multiple for estimates that keep rising, and nothing in Applied’s own numbers shows the spending cycle turning yet.
What Applied Materials’ Nov. 12 Report Has to Show
Applied reports its fiscal fourth quarter on Nov. 12. Revenue needs to land near the $10.25 billion guide and gross margin near 50.4%, but the first guide for fiscal 2027’s 14-week first quarter matters most. By Nov. 16, both funds’ Sept. 30 filings will show whether Gerstner held on and whether Maverick came back.
So What Is Applied Materials Stock Actually Worth?
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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 of the stocks mentioned. Thank you for reading, and happy investing!
