Applied Materials, Inc. (AMAT) Stock Analysis
Score BCompounder · Grade A · Bullish
$408.20
$264.61
-35.2%
8/10
A
Compounder
Investment Thesis
Price is above modeled value range. Quality supports holding but not attractive for new positions.
High-quality company trading above modeled fair value. Price above modeled entry range.
For New Investors
Price above modeled value range
For Current Holders
Quantitative score: neutral
Buy if
- Price drops 15-20% (improves asymmetry)
- Bull scenario catalysts materialize
- Market-wide correction creates opportunity
Sell if
- Bear scenario triggers occur
- Quality metrics deteriorate (ROIC declining)
- Better alternatives emerge
Valuation
Fair Value estimate: $264.61 (-35.2%). Overvalued vs fundamentals. (Methods diverge significantly. Conservative estimate shown.)
PEG-Based EPS
$612.29
FCF DCF Model
$149.64
EV/EBITDA
$259.04
Blended Fair Value
$264.61
Confidence
Low
Methods
PEG-Based EPS (conservative), FCF 2-Stage DCF, EV/EBITDA
Quality Analysis
117/120 points
Investable
ROE (3Y Avg)
38.0%
ROIC-WACC Spread
11.6%
D/E Ratio
0.3x
Current Ratio
2.6x
Interest Coverage
31x
FCF Positive Years
3/3
Quality Flags
- Leverage: D/E 0.3x (12/15 pts)
Market Sentiment
Wall Street Consensus
$517.00
+26.7% Upside
35 analysts
Range: $425.00 — $575.00
Rating: Buy
Our model is slightly more cautious than Wall Street.
Trend & Technical
Price ($408.20) is 44.2% above SMA 200 ($283.13). Bullish trend confirmed.
Tech Score 78/100 — Strong technical setup. Trend, momentum, and positioning aligned bullish.
Risk & Reward
Asymmetry Ratio
0.35:1
Expected Return
-6.5%
Bull Upside
+8.5%
Bear Downside
-24.0%
Poor asymmetry: 0.35:1 ratio. Risk exceeds potential reward.
Verdict: Unfavorable
Scenario Analysis
Bear
Base
Bull
Buy Zone & Action Plan
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AI Executive Summary
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Technical Analysis
RSI, MACD, moving averages, trend signals, and momentum indicators.
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Frequently Asked Questions
What is the fair value of AMAT?
Based on our multi-method conviction analysis, the estimated fair value of Applied Materials, Inc. (AMAT) is $264.61. This is calculated by blending PEG-Based EPS (conservative), FCF 2-Stage DCF, EV/EBITDA and applying a quality premium of 0% based on the company's fundamentals. The confidence level of this estimate is low.
Is AMAT a buy, sell, or hold?
AMAT currently has a HOLD rating with a conviction score of 8/10. Price is above modeled value range. Quality supports holding but not attractive for new positions. Price above modeled value range.
Is AMAT a high-quality stock?
Applied Materials, Inc. has a quality grade of A (117/120 points), rated as Investable. Key metrics include ROE of 38.0%, ROIC-WACC spread of 11.6%, and D/E ratio of 0.3x.
What type of stock is AMAT?
AMAT is classified as a "compounder" in our framework. High P/E: 38.4x, Low dividend (reinvesting): 0.5%, Mature growth: 6.0%, High beta (cyclical behavior): 1.65, Large cap: $323.9B
What do Wall Street analysts say about AMAT?
35 Wall Street analysts have a consensus price target of $517.00 for AMAT, representing +26.7% upside. Targets range from $425.00 to $575.00. The consensus recommendation is "Buy". Our model is slightly more cautious than Wall Street.
What are the risks of investing in AMAT?
The risk/reward asymmetry ratio for AMAT is 0.35:1, rated as Unfavorable. Poor asymmetry: 0.35:1 ratio. Risk exceeds potential reward. The expected return is -6.5%, with bull case upside of +8.5% and bear case downside of -24.0%.
What is the current trend for AMAT?
AMAT is in a bullish trend. Price ($408.20) is 44.2% above SMA 200 ($283.13). Bullish trend confirmed. The technical score is 78/100.
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Last updated: May 19, 2026 · Framework version 3.7
This analysis is for informational purposes only and should not be considered financial advice. Always do your own research before making investment decisions.