Applied Materials, Inc. (AMAT) Up 4.8% — Is Now the Time to Move?
Applied Materials, Inc. (AMAT) delivered a decisive rebound this Tuesday, closing at $510.03 on the NASDAQ, a $23.27 gain from the prior close of $486.76. The advance gives the stock fresh footing after a steep pullback. AMAT still sits roughly 31.0% below its 52-week high of $739.67, reached on June 30, 2026. That gap leaves meaningful room for recovery for a company whose earnings trajectory has kept climbing while the share price retreated.
Volume came in at approximately 5.27 million shares against a 90-day average of about 8.60 million, roughly 61% of normal turnover. The gain arrived without a surge in activity, and buyers lifted the stock nearly 5% on lighter-than-usual trading.
Why Applied Materials, Inc. Price is Moving Higher
The move up is the result of Morgan Stanley's September 28 note, which investors read as a vote of confidence in Applied Materials' earnings power. The bank raised its 2027 revenue forecast to $50.7 billion from $50.2 billion and lifted its 2027 EPS estimate to $20.92 from $20.44. It also cut its price target to $563 from $642 and kept an Equal Weight rating. That reduction came from compressing the valuation multiple to 22 times from 26 times, not from any weakening in the business outlook. The market focused on the upward estimate revisions. Even the lowered $563 target sits about 10% above Tuesday's close, and the higher earnings base signals that Morgan Stanley's view of Applied's fundamentals is improving.
The rally was clearly stock-specific. The Nasdaq gained just 0.2%, while the S&P 500 and Dow finished roughly flat. Semiconductor names did move in sympathy with AMAT's re-rating: Lam Research Corporation (LRCX) climbed 2.99% and KLA (KLAC) added 2.89%. Both trailed AMAT's 4.78% advance, while NVIDIA Corporation (NVDA) slipped 0.72%.
The estimate revisions build on a strong fiscal Q3, reported on August 13. Applied posted non-GAAP EPS of $3.50 against a $3.40 consensus, and revenue of $9.12 billion topped the $8.99 billion estimate. Revenue grew 25% year over year and non-GAAP EPS jumped 41%. Non-GAAP operating margin expanded to 34.0% from 30.7%. Management guided Q4 revenue to $10.25 billion, plus or minus $500 million, and non-GAAP EPS to $4.02, plus or minus $0.20. It also raised its 2026 Semiconductor Systems growth outlook to more than 30%, citing AI-related demand. Morgan Stanley's higher 2027 numbers extend that momentum further out, and Tuesday's buyers are positioning ahead of it.
What is the Applied Materials, Inc. Rating - Should I Buy?
Weiss Ratings assigns AMAT a B- rating. Current recommendation is Buy. The rating reflects a business performing at a high level on nearly every fundamental dimension. The only restraints are recent share-price turbulence and a valuation that already prices in considerable growth.
The fundamental case is exceptionally strong. Applied Materials is rated Excellent on the Growth Index, Efficiency Index, and Solvency Index. Revenue growth of 24.83% is a remarkable pace for a company already generating tens of billions in annual sales. It confirms that AI-driven fab investment is expanding Applied's addressable market rather than simply lifting a cyclical tide. The Excellent Efficiency Index rating is backed by a 41.07% ROE and a 30.05% profit margin. Those are standout returns for a capital-equipment maker that must fund heavy R&D to stay ahead on deposition, etch, and inspection technology. Widening operating margins show pricing power holding firm as volumes rise. The Excellent Solvency Index rating means the company can keep investing through any cyclical air pocket without straining its balance sheet.
Where the picture becomes more nuanced is in the market-facing measures. Applied is rated Good on the Total Return Index, which reflects solid longer-term rewards for shareholders. The rating stops short of Excellent because the stock has given back roughly 31% from its June high. The Fair rating on the Volatility Index shows why this is a B- and not a higher grade. A stock that can swing nearly 5% in a single session on sell-side estimate revisions, as it did Tuesday, carries real price risk. A forward P/E of 41.98 against trailing EPS of $11.60 means expectations are elevated. Morgan Stanley's decision to trim its multiple to 22 times is a reminder that valuation can compress even as earnings rise. For investors willing to accept that turbulence, the pullback from $739.67 offers an entry point into a fundamentally elite operator.
Within the Information Technology sector, Applied Materials is in line with Lam Research Corporation (LRCX, B-), Broadcom Inc. (AVGO, B-), and Texas Instruments Incorporated (TXN, B-). It sits a notch below NVIDIA Corporation (NVDA, B) and Micron Technology, Inc. (MU, B). The entire group rates in Buy territory, and Applied's Excellent marks across Growth, Efficiency, and Solvency hold up against any name on that list.
About Applied Materials, Inc.
Applied Materials, Inc. (AMAT) is an Information Technology company and the world's largest supplier of equipment, services, and software used to manufacture semiconductor chips and advanced displays. Founded in 1967 and headquartered in Santa Clara, California, the company describes its core competency as materials engineering: depositing, shaping, modifying, and analyzing materials at the atomic scale. That expertise is what makes leading-edge logic and memory chips possible. Its customers include the world's major foundries, logic manufacturers, and DRAM and NAND memory producers.
The Semiconductor Systems segment is the largest contributor and spans nearly every critical step in wafer fabrication. The portfolio includes chemical vapor deposition on the Producer platform, physical vapor deposition on the Endura platform, and atomic layer deposition. It also covers etch systems such as the Sym3 family, the Centura platform, ion implantation, chemical mechanical planarization, and rapid thermal processing. Applied's process diagnostics and control business adds e-beam inspection and metrology tools, including the PROVision and VeritySEM lines. The Applied Global Services segment supplies spare parts, upgrades, and service agreements across a large installed base of tools, producing recurring revenue that smooths the equipment cycle. A Display segment provides manufacturing equipment for LCD and OLED panels used in televisions, smartphones, and other devices.
Applied's competitive advantage rests on the breadth of its portfolio and the depth of its engineering relationships with chipmakers. As transistor architectures move toward gate-all-around designs, backside power delivery, and advanced packaging for AI accelerators, chip performance depends increasingly on new materials and integrated process steps. Applied is positioned to supply many of those steps at once. That breadth, combined with decades of process know-how and a global service footprint, creates switching costs that competitors struggle to match.
Investor Outlook
Applied Materials (AMAT) carries a Weiss Rating of B- (Buy). Tuesday's rally shows the market rewarding upward earnings revisions even as analysts debate the right multiple. Investors should watch whether fiscal Q4 results land at or above the $10.25 billion revenue midpoint and $4.02 EPS guidance, and whether Semiconductor Systems growth exceeds the raised 30%-plus outlook as AI-related fab spending carries into 2027. See full rankings of all B- rated Information Technology stocks inside the Weiss Stock Screener.
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