Applied Materials (AMAT)
NASDAQInformation TechnologySemiconductorsSnapshot 2026-09-04
$454.71+4.31%
Close 2026-09-04 · 1-day change
NASDAQInformation TechnologySemiconductorsSnapshot 2026-09-04
Intact: The reason to own it still holds.
Applied Materials aims to grow its semiconductor equipment business by 20% in 2026. Recent quarters show revenue growth from $6.78B in 2024-Q3 to $7.91B in 2026-Q2. Profit beats continue with EPS rising to $2.86 in Q2 FY2026. The company invests $500 million to expand manufacturing and R&D capacity.
The stock is selling off sharply, down 23% from highs. High expectations create short-term risk for the 20% growth target. Rising trade and cost pressures could hurt margins and growth. Workforce reductions may signal challenges ahead.
Analysts expect about 32.5% revenue growth next year, pricing in strong growth. Our fair value is about 52% below the Street median, suggesting the market may be overly optimistic. We see risk in sustaining the high growth and margin targets.
Breaks if: Investment plans materially reduced or delayed in 2026
Breaks if: EPS guidance falls below $3.16 next quarter
This is not a price target or investment advice.
A long-form read on the 1–3 year hold thesis. It updates when the weekly evidence changes.
This is a durable compounder with a focus on the semiconductor equipment business. The current thesis state reflects strong recent financial performance, but there are concerns about execution quality and elevated risks.
The market appears to have priced in a stretched valuation due to weak execution quality and elevated risks. There is a 15% expectations gap, indicating that investors may be anticipating some challenges ahead.
Management is on track to achieve its growth targets, with semiconductor equipment revenue showing strong growth. However, the recent history of misses raises some caution, even with a low probability of missing expectations in the near term.
The thesis hinges on several factors, including guidance from management in upcoming calls, potential interest rate cuts by the Fed, and performance from sector leaders like NVDA and TSM. These elements could significantly influence AMAT's trajectory.
The most important moves since the prior daily snapshot.
Yes, our read has strengthened. The company expects strong demand for AI infrastructure. This supports higher revenue expectations for semiconductor equipment makers. Management aims to grow the semiconductor equipment business by over 30% in 2026. There are no new threats to the thesis.
as of 2026-09-04
Review the evidence to watch, what would become a concern, and what would make it less concerning.
Not investment advice. Scores describe historical and current data; they are not forecasts of future returns. Consult a licensed advisor before making investment decisions.
Breaks if: YoY semiconductor equipment revenue growth falls below ~7% in FY26
Over the next 1 to 3 years, AMAT's performance will depend on management execution and broader market conditions. Not investment advice.