📊 AMAT Key Takeaways
Is Applied Materials Inc. /de (AMAT) a Good Investment?
Applied Materials demonstrates exceptional profitability with 32.4% net margins and a pristine balance sheet (0.22x debt-to-equity), but concerning margin compression (-2.5% net income decline YoY despite 4.4% revenue growth) signals operational headwinds. Modest revenue growth and deteriorating profitability momentum offset the company's fortress balance sheet and strong cash generation.
Applied Materials shows strong core fundamentals, with high gross and operating margins, solid free cash flow generation, and a conservatively leveraged balance sheet. Revenue is still growing and EPS is stable, but the slight decline in net income suggests growth quality should be monitored for mix, costs, and cyclicality rather than assumed to be accelerating.
Applied Materials Inc. /de Key Strengths (AMAT)
- Exceptional profitability metrics (49.5% gross margin, 29.4% operating margin, 32.4% net margin)
- Fortress balance sheet with minimal leverage (0.22x debt-to-equity) and strong liquidity (2.51x current ratio)
- Robust cash generation with $1.2B free cash flow and 36.9x interest coverage ratio
- Strong returns on capital (20.2% ROE, 12.0% ROA) demonstrating efficient capital deployment
- Healthy cash position of $6.3B providing strategic flexibility
- High profitability with 49.0% gross margin, 26.1% operating margin, and 28.9% net margin
- Strong financial health supported by $7.22B in cash, 2.71x current ratio, and low 0.30x debt-to-equity
- Healthy cash generation with $1.04B in free cash flow and 15.5x interest coverage
AMAT Stock Risks: Applied Materials Inc. /de Investment Risks
- Margin compression evident in net income declining 2.5% YoY while revenue grew 4.4% - suggests cost control and operational challenges
- Modest revenue growth rate (4.4%) insufficient for semiconductor capital equipment industry leadership
- High operational leverage exposes profitability to any further revenue headwinds
- EPS growth essentially flat (0.6% YoY) despite asset base and shareholder equity growth indicates profitability stagnation
- Operating expense ratio appears to be increasing relative to revenue, reducing net income leverage
- Net income declined 2.5% YoY despite revenue growth, which may indicate margin or expense pressure
- Revenue growth of 4.4% is positive but not especially strong for a cyclical semiconductor equipment business
- Capital intensity remains meaningful, with $646.00M in capex that could rise if demand or technology transitions require more investment
Key Metrics to Watch
- Gross margin trend - any further compression would indicate structural pricing or cost challenges
- Operating margin trajectory - critical to assess if operational headwinds are transient or structural
- Revenue growth acceleration - need sustained growth above 5-6% to justify capital intensity
- Free cash flow conversion rate and operating cash flow margins - to confirm profitability challenges aren't deteriorating cash generation
- Operating margin and net income trend
- Free cash flow margin
Applied Materials Inc. /de (AMAT) Financial Metrics & Key Ratios
💡 AI Analyst Insight
Strong liquidity with a 2.51x current ratio provides a solid financial cushion.
AMAT Profit Margin, ROE & Profitability Analysis
AMAT vs Technology Sector: How Applied Materials Inc. /de Compares
How Applied Materials Inc. /de compares to Technology sector averages
Sector benchmarks are approximate industry averages. Actual sector performance may vary.
Is Applied Materials Inc. /de Stock Overvalued? AMAT Valuation Analysis 2026
Based on fundamental analysis, Applied Materials Inc. /de appears fundamentally strong relative to the Technology sector in 2026.
Note: This is a fundamental analysis based on SEC filings. For P/E ratio, price targets, and market-based valuation, consult financial data providers. This is not investment advice.
Applied Materials Inc. /de Balance Sheet: AMAT Debt, Cash & Liquidity
AMAT Revenue & Earnings Growth: 5-Year Financial Trend
5-Year Trend Summary: Applied Materials Inc. /de's revenue has grown significantly by 23% over the 5-year period, indicating strong business expansion. The most recent EPS of $8.11 reflects profitable operations.
AMAT Revenue Growth, EPS Growth & YoY Performance
AMAT Quarterly Earnings & Performance
| Quarter | Revenue | Net Income | EPS |
|---|---|---|---|
| Q2 2026 | $7.1B | $2.1B | $2.63 |
| Q1 2026 | $7.0B | $1.2B | $1.45 |
| Q3 2025 | $6.8B | $1.7B | $2.05 |
| Q2 2025 | $6.6B | $1.7B | $2.06 |
| Q1 2025 | $6.7B | $1.2B | $1.45 |
| Q3 2024 | $6.4B | $1.6B | $1.85 |
| Q2 2024 | $6.6B | $1.6B | $1.86 |
| Q1 2024 | $6.7B | $1.7B | $2.02 |
Data sourced from SEC EDGAR 10-Q quarterly filings. Figures may represent quarterly or cumulative values.
Applied Materials Inc. /de Dividends, Buybacks & Capital Allocation
AMAT SEC Filings: Latest 10-K & 10-Q Analysis
Access official SEC EDGAR filings for Applied Materials Inc. /de (CIK: 0000006951)
📋 Recent SEC Filings
| Date | Form | Document | Action |
|---|---|---|---|
| Jun 5, 2026 | 4 | xslF345X06/wk-form4_1780693451.xml | View → |
| Jun 5, 2026 | 4 | xslF345X06/wk-form4_1780693363.xml | View → |
| May 28, 2026 | 4 | xslF345X06/wk-form4_1780004871.xml | View → |
| May 26, 2026 | 4 | xslF345X06/wk-form4_1779832797.xml | View → |
| May 22, 2026 | 4 | xslF345X06/wk-form4_1779484992.xml | View → |
❓ Frequently Asked Questions about AMAT
What is the AI rating for AMAT?
Applied Materials Inc. /de (AMAT) has a Combined AI Grade of A from Claude (B) and ChatGPT (A) with 79% combined confidence, based on fundamental analysis of SEC EDGAR filings.
What are AMAT's key strengths?
Claude: Exceptional profitability metrics (49.5% gross margin, 29.4% operating margin, 32.4% net margin). Fortress balance sheet with minimal leverage (0.22x debt-to-equity) and strong liquidity (2.51x current ratio). ChatGPT: High profitability with 49.0% gross margin, 26.1% operating margin, and 28.9% net margin. Strong financial health supported by $7.22B in cash, 2.71x current ratio, and low 0.30x debt-to-equity.
What are the risks of investing in AMAT?
Claude: Margin compression evident in net income declining 2.5% YoY while revenue grew 4.4% - suggests cost control and operational challenges. Modest revenue growth rate (4.4%) insufficient for semiconductor capital equipment industry leadership. ChatGPT: Net income declined 2.5% YoY despite revenue growth, which may indicate margin or expense pressure. Revenue growth of 4.4% is positive but not especially strong for a cyclical semiconductor equipment business.
What is AMAT's revenue and growth?
Applied Materials Inc. /de reported revenue of $14.9B.
Does AMAT pay dividends?
Applied Materials Inc. /de pays dividends, with $730.0M distributed to shareholders in the trailing twelve months.
Where can I find AMAT SEC filings?
Official SEC filings for Applied Materials Inc. /de (CIK: 0000006951) including 10-K, 10-Q, and 8-K reports are available on SEC EDGAR.
What is AMAT's EPS?
Applied Materials Inc. /de has a diluted EPS of $6.05.
How is the AI analysis conducted?
Two independent AI systems — Claude (Anthropic) and ChatGPT (OpenAI) — analyze SEC EDGAR filings including 10-K annual reports and 10-Q quarterly reports. Each AI evaluates financial health, profitability ratios, balance sheet strength, and growth metrics. The combined grade reflects both perspectives for balanced insights.
What is AMAT's fundamental grade?
Based on our AI fundamental analysis in June 2026, Applied Materials Inc. /de has a A grade with 79% confidence. The AI analysis suggests favorable fundamentals based on SEC filings. This is not investment advice.
Is AMAT stock overvalued or undervalued?
Valuation metrics for AMAT: ROE of 20.2% (sector avg: 22%), net margin of 32.4% (sector avg: 18%). Compare these metrics with sector averages to assess valuation.
What is AMAT's AI grade for 2026?
Our dual AI analysis gives Applied Materials Inc. /de a combined A grade for 2026. Revenue is data pending, with profitability above sector average. Always conduct your own research.
What is AMAT's free cash flow?
Applied Materials Inc. /de's operating cash flow is $2.5B, with capital expenditures of $1.3B. FCF margin is 8.4%.
How does AMAT compare to other Technology stocks?
Vs Technology sector averages: Net margin 32.4% (avg: 18%), ROE 20.2% (avg: 22%), current ratio 2.51 (avg: 2.5).