AMAT
Applied Materials, Inc.
Information Technology / Semiconductor Equipment / Santa Clara, CA
AnalystScope signal
Buy
Scheduled quote
$508
Base fair value
$589
Bear / base / bull
$500 / $589 / $651
Upside / downside
+16.1 upside
Confidence
High
Research updated Jun 13, 2026
Daily scheduled refresh as of Aug 1, 2026, 6:05 AM UTC. Fresh through Aug 2, 2026, 6:05 AM UTC.
Informational research only. Not personalized investment advice.
Model vs published view
Current model signal differs from the latest published analyst rating.
Live current-price moves may be widening the gap versus the latest published view.
Investment summary
Current view and thesis
Applied Materials adds a clean semiconductor-equipment anchor for future AMAT versus LRCX comparisons. The initial valuation spread is positive but intentionally moderate.
Fair value $589 vs. current $508 (+16.1 upside). Current base fair value is $589 versus $508, implying +16.1 upside.
Key drivers
Leading-edge foundry, logic, and memory investment drive the cycle.
Services and installed-base exposure support resilience through downturns.
Strong margins and cash conversion support the valuation floor.
Key risks
Semiconductor equipment demand can reverse quickly if capex plans slow.
Export controls and China exposure can create abrupt order volatility.
A premium multiple leaves limited room for cycle disappointment.
What would change the view
A wider discount to fair value would make the quality case more compelling.
Evidence of broader equipment demand beyond AI-related pockets would improve confidence.
Order weakness or export-control pressure would reduce conviction.
Valuation
Price, range, and method support
Base case $589 / +16.1 upside / high confidence
Price vs fair value
+16.0%
Model-implied return
Scheduled quote
$508
Fair value
$589
Valuation method stack
Weighted fair value $589
Published method weights
DCF (Base)
$596 | 45%
NTM P/E Multiple
$586 | 35%
EV/EBITDA Cross-check
$581 | 20%
| Case / method | Value | Weight / support |
|---|---|---|
| DCF (Base) | $596 | 45% |
| NTM P/E Multiple | $586 | 35% |
| EV/EBITDA Cross-check | $581 | 20% |
| Bear case | $500 | Supportive |
| Base case | $589 | Supportive |
| Bull case | $651 | Supportive |
Fundamental analysis
Reported evidence and normalized model base
Normalized annual basis: FY2025
Normalized figures are AnalystScope's annual valuation model base.
| Normalized metric | Latest value | Growth / margin context |
|---|---|---|
| Revenue | $31.0B | +14.0% YoY |
| Operating income | $9.5B | 30.6% margin |
| Net income | $8.4B | EPS proxy $10.36 |
| Free cash flow | $8.4B | 27.1% margin |
| EBITDA | $10.2B | 32.9% margin |
| Net cash / (debt) | $3.3B | +10.6% of revenue |
| Metric | Reported | AnalystScope normalized | Basis note |
|---|---|---|---|
| Revenue (TTM) | $28.4B | $31.0B | Model revenue smooths wafer-fab-equipment cycle timing and avoids over-crediting one demand spike. |
| Operating Margin | 29.2% | 30.6% | Margin input anchors to high-quality equipment economics while allowing for cycle volatility. |
| FCF (TTM) | $5.7B | $8.4B | FCF input normalizes working capital and capex timing through semiconductor equipment cycles. |
| Net Cash / (Debt) | ($154.0M) | $3.3B | Balance-sheet treatment gives credit for net cash but does not let it dominate the valuation. |
Fundamental snapshot
FY2025
Normalized annual model base
Revenue
+14.0% YoY
$31.0B
Op. margin
+1.6% pts
30.6%
FCF margin
+0.3% pts
27.1%
Revenue + margin trend
Annual normalized model-base history.
Revenue
Operating margin
AnalystScope annual model-base statements in USD across FY2023 | FY2024 | FY2025.
Income statement
| Line item | FY2023 | FY2024 | FY2025 |
|---|---|---|---|
| Revenue | $26.5B | $27.2B | $31.0B |
| Gross Profit | $12.4B | $12.8B | $14.8B |
| Operating Income | $7.6B | $7.9B | $9.5B |
| EBITDA | $8.1B | $8.4B | $10.2B |
| Net Income | $6.6B | $7.1B | $8.4B |
Balance sheet
| Line item | FY2023 | FY2024 | FY2025 |
|---|---|---|---|
| Cash & Investments | $7.3B | $7.8B | $8.4B |
| Total Debt | $5.5B | $5.3B | $5.1B |
| Net Cash / (Debt) | $1.8B | $2.5B | $3.3B |
| Total Assets | $31.0B | $32.5B | $34.0B |
| Total Liabilities | $16.0B | $16.5B | $16.8B |
| Shareholders' Equity | $15.0B | $16.0B | $17.2B |
Cash flow
| Line item | FY2023 | FY2024 | FY2025 |
|---|---|---|---|
| Operating Cash Flow | $7.7B | $8.0B | $9.3B |
| Depreciation & Amortization | $500.0M | $500.0M | $700.0M |
| Capital Expenditures | ($700.0M) | ($700.0M) | ($900.0M) |
| Free Cash Flow | $7.0B | $7.3B | $8.4B |
Model assumptions
Base-case inputs and sensitivity
Published AnalystScope assumptions; private edits do not change this base case.
Revenue CAGR (5Y)
7.0%
+/- 1.0% => +/-$14/sh
Why this level: This is AnalystScope's base-case growth assumption, not a guarantee. It sits below the latest FY model-base revenue pace (2025.0%), so the model does not extend current strength too far into the outer years. Current company context: Leading-edge foundry, logic, and memory investment drive the cycle.
Terminal Growth
2.7%
+/- 0.5% => +/-$10/sh
Why this level: This is AnalystScope's mature long-run growth assumption, not a perpetual hypergrowth claim. At 2.7%, it sits well below the 7.0% five-year revenue CAGR, so the model steps down from the explicit forecast period to a steadier long-run pace. For Applied Materials, Inc., that means a durable franchise can keep compounding after year five without assuming today's faster growth profile lasts indefinitely.
WACC
8.9%
+/- 0.5% => -$18/sh
Why this level: This is AnalystScope's base-case cost-of-capital judgment, not a precise CAPM output. It reflects the current rates backdrop, equity risk premium, and the company's balance-sheet posture. Net cash supports cycle resilience
Operating Margin (Year 5)
31.0%
+/- 100 bps => +/-$12/sh
Why this level: This is AnalystScope's base-case margin view, not a promise of straight-line expansion. It keeps year-five margins close to today's model-base operating margin (30.6%), which implies the current margin structure is broadly durable. Margin input anchors to high-quality equipment economics while allowing for cycle volatility.
Sensitivity drivers
Revenue CAGR (5Y)
7.0%
+/- 1.0% => +/-$14/sh
Terminal Growth
2.7%
+/- 0.5% => +/-$10/sh
WACC
8.9%
+/- 0.5% => -$18/sh
Operating Margin (Year 5)
31.0%
+/- 100 bps => +/-$12/sh
Confidence
High
Method outputs are tightly grouped at +2.5% dispersion.
Why the model view could be wrong
Semiconductor equipment demand can reverse quickly if capex plans slow.
Export controls and China exposure can create abrupt order volatility.
A premium multiple leaves limited room for cycle disappointment.
Private analysis
Test your own assumptions in Scenario Builder
Private scenarios remain separate from AnalystScope's published base case.
Private workspace
Scenario Builder
Private scenario sandbox
This is a private modelling layer, not the public AnalystScope base case or printable snapshot. It keeps the public base case as the anchor, applies bounded changes to the four core valuation inputs, and updates your scenario fair-value estimate immediately.
Saved scenarios currently stay local to this browser for AMAT. Base-case rationale remains in the public assumptions section above. Your scenario output reprices the published valuation methods from projected operating anchors when those anchors are available, while keeping market-multiple and capital-structure assumptions anchored to the AnalystScope framework.
Editable assumptions
Adjust your scenario inputs within the displayed plausible range for this company. The workbench stays anchored to the public AnalystScope base case.
This is a bounded scenario tool, not a free-form spreadsheet. Values outside the displayed range snap back to the nearest allowed value when you leave the field.
Matches the published AnalystScope base case.
Revenue CAGR (5Y)
Public AnalystScope base case: 7.0% | +/- 1.0% => +/-$14/sh
Allowed range: 1.0% to 13.0%
Terminal Growth
Public AnalystScope base case: 2.7% | +/- 0.5% => +/-$10/sh
Allowed range: 1.2% to 4.2%
WACC
Public AnalystScope base case: 8.9% | +/- 0.5% => -$18/sh
Allowed range: 6.9% to 10.9%
Operating Margin (Year 5)
Public AnalystScope base case: 31.0% | +/- 100 bps => +/-$12/sh
Allowed range: 23.0% to 39.0%
Saved private scenarios
Save up to 5 named scenarios for AMAT. These are your scenarios: they never overwrite the public AnalystScope base case and remain clearly separate from public research.
Checking private workspace session...
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Keep a short thesis, main risk, or why this case differs from the published base case.
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Notes stay local to this browser unless you sign in to the private workspace, and they never appear as published AnalystScope research.
No private scenarios saved yet. Make a change to the published base case, then save a named scenario here.
Published base case
Fair value
$589
Upside / Downside
+16.1 upside
Model signal
Buy
Published base-case output
Scenario output reprices the published DCF and multiple methods from projected year-5 revenue, margin, free cash flow, EBITDA, and EPS anchors. Market multiples and capital structure stay anchored to the published base framework.
Fair value
$589
$0/sh vs published base case
Upside / Downside
+16.1 upside
+0.0 pts vs published base case
Model signal
Buy
Unchanged versus the published base case.
Method movement inside the scenario
This breakdown shows what moved inside the published valuation framework when you edit the scenario. The published AnalystScope base case stays anchored, and any method without a clean projected anchor remains pinned to that framework.
Method rows below reflect the current edited scenario state, not just the saved scenario snapshots.
Influence tags are directional rather than exact attribution. They estimate which edited input is moving each method most by reverting one assumption at a time while the other edited inputs stay in place.
| Method | Published base | Edited scenario | Delta | How it moved / main drivers |
|---|---|---|---|---|
DCF (Base) DCF-style | 45% weight | $596 | $596 | $0/sh | Base-aligned This method is supported by the model-native bridge and currently stays aligned with the published base case. Edited inputs are largely offsetting each other, so this row stays close to the published base case. |
NTM P/E Multiple P/E-style | 35% weight | $586 | $586 | $0/sh | Base-aligned This method is supported by the model-native bridge and currently stays aligned with the published base case. Edited inputs are largely offsetting each other, so this row stays close to the published base case. |
EV/EBITDA Cross-check EV-based multiple | 20% weight | $581 | $581 | $0/sh | Base-aligned This method is supported by the model-native bridge and currently stays aligned with the published base case. Edited inputs are largely offsetting each other, so this row stays close to the published base case. |
Weighted fair value Published framework result | Published framework result | $589 | $590 | +$1/sh | Moved Combines the repriced method outputs using the published AnalystScope weights. No single edited assumption is dominating this move in a material way. |
Published base case vs private scenarios
Compare the published AnalystScope base case against your saved private scenarios in one view. Saved scenarios remain local to this browser, and the table below reflects saved snapshots rather than any unsaved edits currently sitting in the editor.
Fair-value comparisons use the same workbench recalculation path as the editor above.
Published base case stays pinned as the anchor row.
| Scenario | Revenue CAGR (5Y) | Terminal Growth | WACC | Op. Margin (Y5) | Fair Value | Upside / Downside | Model Signal | Delta vs Base | Action |
|---|---|---|---|---|---|---|---|---|---|
AnalystScope base case PublishedOfficial AnalystScope anchor row. | 7.0% | 2.7% | 8.9% | 31.0% | $589 | +16.1 upside | Buy | Published anchor |
Supporting research
Quality, normalization, and monitoring evidence
Annual model base: FY2023 | FY2024 | FY2025
Thesis scorecard
Growth
StrongAI, leading-edge logic, and memory investment support long-run demand.
Profitability
StrongMargins and returns are strong for the model architecture.
Balance sheet
StrongNet cash provides resilience through equipment cycles.
Valuation
ModerateQuality is recognized in the multiple.
Execution / Resilience
StrongScale and process breadth support competitive resilience.
Current source status
Quote: Daily scheduled refresh as of Aug 1, 2026, 6:05 AM UTC. Fresh through Aug 2, 2026, 6:05 AM UTC.
Reported fundamentals: Fundamentals refreshed 1 Aug 2026, 16:00 UTC. Fresh through 2 Aug 2026, 04:00 UTC.
Latest filing: 4 filed Jul 6, 2026 | Reporting period Jul 1, 2026. Filing refreshed Aug 1, 2026, 4:26 PM UTC. Fresh through Aug 2, 2026, 4:26 AM UTC.
Annual model-base income-statement, cash-flow, and balance-sheet metrics, plus cross-statement quality relationships with compact prior-FY direction cues, derived from the curated statement backbone.
Basis: FY2023 | FY2024 | FY2025. Live reported fundamentals remain available in the reconciliation section.
Operating and cash-flow trends
Revenue growth (1Y)
+14.0%
Gross margin
47.7%
Operating margin
30.6%
Operating margin change vs prior FY
+1.6 pts
EBITDA margin
32.9%
EBITDA margin change vs prior FY
+2.0 pts
Operating income growth (1Y)
+20.3%
Net margin
27.1%
FCF margin
27.1%
FCF margin change vs prior FY
+0.3 pts
FCF growth (1Y)
+15.1%
Balance sheet quality
Cash & investments
$8.4B
Total debt
$5.1B
Net cash / (debt)
Net cash $3.3B
Net cash / (debt) as % of revenue
Net cash 10.6% of revenue
Liabilities / assets
vs FY2024 (-1.4 pts)
49.4%
Cross-statement quality
Gross-to-operating spread
17.1 pts
Operating cash flow / net income
vs FY2024 (-0.0x)
1.1x
Operating cash flow / EBITDA
vs FY2024 (-0.0x)
0.9x
Free cash flow / net income
vs FY2024 (-0.0x)
1.0x
CapEx as % of revenue
vs FY2024 (+0.3 pts)
2.9%
CapEx as % of operating cash flow
vs FY2024 (+0.9 pts)
9.7%
CapEx / D&A
vs FY2024 (-0.1x)
1.3x
Cash & investments / total debt
vs FY2024 (+0.2x)
1.6x
Shareholders' equity as % of revenue
55.5%
Asset turnover
vs FY2024 (+0.1x)
0.9x
Compact model-base diagnostics for analyst triage, highlighting where the durable valuation base is diverging most clearly from the latest reported picture.
Adjustment focus
Large analyst adjustmentCash flow | FCF (TTM) | +$2.7B / +47%
Revenue momentum
Improving+14.0% latest 1Y growth
vs +2.6% prior 1Y
Operating margin trend
Improving30.6% latest margin
+160 bps vs prior FY
FCF margin trend
Stable27.1% latest FCF margin
+26 bps vs prior FY
Balance-sheet posture
StableNet cash 10.6% of revenue
vs Net cash 9.2% of revenue prior FY
How to read this
Reported = the latest company-reported figure. Model base = AnalystScope's comparable operating base used for valuation and thesis work. It may include standardization, conservative balance-sheet treatment, working-capital cleanup, and through-cycle adjustments when current reported numbers do not look durable.
This is an analyst model base, not a claim of perfect adjusted truth. Larger gaps can reflect deliberate cyclical or base-case adjustments, not just light accounting cleanup.
Why the model base differs
Applied Materials is modeled as a high-quality semiconductor equipment franchise with strong cash conversion, but cycle risk keeps the initial upside view restrained.
Rows are sorted by largest comparable adjustment first.
| Metric | Model base | Live reported | Variance vs reported | Adjustment size | Why lower / higher? |
|---|---|---|---|---|---|
FCF (TTM) | $8.4B FY2025 model base | $5.7B Live reported TTM | +$2.7B / +47% | Large analyst adjustment | Model base is higher than live reported because the model does not assume the latest cash-flow drag is fully durable. It normalizes working capital and capex timing through semiconductor equipment cycles. |
Net Cash / (Debt) | $3.3B FY2025 model base | ($154.0M) Live reported balance sheet | +$3.5B / +12% of revenue | Large analyst adjustment | Model base is less conservative than the live reported balance-sheet figure because the latest reported balance does not appear fully representative. It gives credit for net cash but does not let it dominate the valuation. |
Revenue (TTM) | $31.0B FY2025 model base | $28.4B Live reported TTM | +$2.6B / +9% | Close to reported | Model base is higher than live reported because the thesis does not assume the latest reported softness is the durable revenue run-rate. It smooths wafer-fab-equipment cycle timing and avoids over-crediting one demand spike. |
Operating Margin | 30.6% FY2025 model base | 29.2% Live reported margin | +1.4 pts | Close to reported | Model base is higher than live reported because the model does not assume the latest reported margin pressure is the durable earnings base. It anchors to high-quality equipment economics while allowing for cycle volatility. |
Near-term catalysts
Order trends and backlog commentary remain the key near-term indicators.
Foundry and memory capex plans can shift the fair-value range.
China/export-control commentary is an important risk monitor.
What we are watching
Whether equipment demand broadens or remains concentrated in a few AI-related categories.
How durable services revenue remains if new equipment orders slow.
Whether margins hold as mix and regional demand shift.
| Date | Event | Published rating | Note |
|---|---|---|---|
| Jun 13, 2026 | New | Hold | Started coverage with a Hold view on strong equipment economics versus a premium cycle-aware valuation. |