Added to YB: 2026-05-19
Pitch date: 2026-05-15
AMAT [neutral]
Applied Materials, Inc.
-7.79%
current return
Author Info
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Company Info
Applied Materials, Inc. provides materials engineering solutions, equipment, services, and software to the semiconductor and related industries in the United States, China, Korea, Taiwan, Japan, Southeast Asia, Europe, and internationally.
Market Cap
$346.5B
Pitch Price
$441.31
Price Target
530.00 (+30%)
Dividend
0.49%
EV/EBITDA
37.17
P/E
41.06
EV/Sales
11.88
Sector
Semiconductors and Semiconductor Equipment
Category
growth
Applied Materials 2QFY26: The Complexity Tax Gets a Volume Multiplier
AMAT (update): Cleared all 4 signposts from Feb. Raised CY26 semi equip growth from >20% to >30% in 90 days. Complexity tax (GAA +30% steps, HBM 3-4x capacity) now has volume multiplier via agentic AI driving incremental CPU/DRAM/NAND wafers. Q2: $7.91B rev, $2.86 EPS, 50%+ gross margin, but FCF only $210M on $2.29B net income (9% conversion) flags working capital concern. DSOs jumped 63→72 days. AGS now $7B+ run-rate at mid-teens growth, 29% margins. At $468 vs $318 Jan entry, stock priced for 'Higher Floor' scenario; needs 'Compounding Era' (sustained >15% growth thru FY29) for upside to $630. Watch Q3 for DSO normalization <65, FCF conversion >35%, revenue ≥$9.1B.
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