AMAT
Applied Materials, Inc.$370.52
Sell
Target $232.96
Report: Mar 08, 2026Technology • Semiconductors • Mature CompounderSnapshot
Decision-first overview with recommendation, valuation anchor, and current setup.
Company Overview
Research Snapshot
Price History
Pelican View
Current$370.52-37.1%
Rec: SellConviction: High
Entry Target
N/A
N/A
Fair Value
$232.96
(37% below current)
Stop Loss
N/A
N/A
Position Size
None
Time Horizon
N/A
Key Metrics
Live Snapshot
Market Data
52 Week High$395.95
52 Week Low$123.74
Avg. 3 Month Volume7.65M
Efficiency
LTM Gross Margin48.7%
LTM EBITDA Margin36.2%
LTM EBIT Margin34.6%
LTM Operating Margin28.2%
LTM ROA22.1%
LTM ROE38.9%
LTM ROIC41.5%
LTM ROCE35.9%
Capital Structure
Market Cap (MM)$271.2B
Enterprise Value (MM)$270.6B
Shares Outstanding793.00M
Total Debt (MM)$6.55B
Cash & Equivalents (MM)$7.22B
LTM Net Debt (MM)$-665.00M
LTM Net Debt/EBITDA-0.1x
Growth
TTM Rev. Growth2.1%
Last 3-Yr Rev. CAGR2.4%
Last 3-Yr EBITDA CAGR7.0%
Last 3-Yr EPS CAGR9.4%
Valuation
Street Target Price$420.83
LTM EV/Revenue9.6x
LTM EV/Gross Profit19.7x
LTM EV/EBIT27.7x
LTM EV/EBITDA26.5x
LTM P/E34.6x
LTM EV/FCF43.7x
LTM P/FCF43.8x
LTM P/TB8.0x
LTM P/B12.5x
Dividend Yield0.4%
Payout Ratio14.1%
Executive SummarySituation: Current price is $370.52 versus fair value $232.96 (-37.1% expected return), and valuation confidence is stable. Debate: Bull case depends on Normalization of AI Infrastructure Spending: As the initial build-out of AI data centers matures, the hyper-growth in equipment orders is likely to revert to the 11% historical CAGR, triggering a multiple de-rating. Bear case centers on Moat Erosion in Mature Nodes: Local Chinese competitors are aggressively subsidizing their own equipment makers, which could permanently impair Applied's pricing power in the ICAPS (IoT, Communications, Automotive, Power, and Sensors) ma... Conclusion: Recommendation is Sell with no position, pending a materially better risk/reward setup.
Bull Case
The bull case rests on the doubling of the advanced packaging business to $3 billion+ driven by HBM demand and the company capturing over 50% share in the transition to GAA transistors. Bulls also point to the rising mix of high-margin recurring revenue from AGS subscriptions as a valuation floor.
Bear Case
The bear case highlights market share stagnation in etch and deposition relative to Lam Research and the vulnerability of the current 37x P/E multiple to any slowdown in AI CapEx. Furthermore, the structural loss of high-margin China revenue is a permanent headwind that buybacks cannot fully offset.
Key Catalysts
Mid-Term (6-18 months)Impact: High
Normalization of AI Infrastructure Spending: As the initial build-out of AI data centers matures, the hyper-growth in equipment orders is li...
Near-Term (0-6 months)Impact: Critical
Further U.S. Export Restrictions: Any expansion of the 'entity list' or tightening of lithography/etch export rules would directly impact th...
Long-Term (18+ months)Impact: Moderate
Applied Materials is at a critical juncture following its $252.5 million settlement with the Department of Commerce and a period of signific...
Primary Risks
Concern: Medium
Moat Erosion in Mature Nodes: Local Chinese competitors are aggressively subsidizing their own equipment makers, which could permanently imp...
Concern: High
Cyclical Downturn in Leading-Edge Logic: If the transition to 2nm or GAA transistors is delayed by major customers like Intel or TSMC, Appli...
Concern: Medium
The stewardship is high-quality, characterized by a board rich in semiconductor M&A and capital allocation expertise, including former CFOs...
Recent Activity
2026-02-13SEC Filing (8-K)
+8.08%Applied Materials settles with U.S. Department of Commerce for $252.5 million over export violations
2026-01-15Analyst Target
+5.69%Firm: Barclays Analyst: Tom O'Malley Price Target: $360.00 Price When Posted: $301.89 Implied Upside: +19.2%
2026-01-09Analyst Target
+6.94%Firm: Goldman Sachs Analyst: James Schneider Price Target: $310.00 Price When Posted: $281.64 Implied Upside: +10.1%
2025-11-25Analyst Target
+5.00%Firm: UBS Analyst: Timothy Arcuri Price Target: $285.00 Price When Posted: $230.91 Implied Upside: +23.4%
2025-09-20SEC Filing (8-K)
+5.48%Applied Materials completes $1.0 billion debt offering to repay maturing notes
Valuation Table
9.8/10Decision Grade
Scenario Range
$198
Bear
$270
Base
$339
Bull
$371