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Applied Materials, Inc. , headquartered in Santa Clara, California, supplies manufacturing equipment, services, and software to the semiconductor, display, and related industries. Valued at a market cap of $155.4 billion, AMAT is the world’s largest supplier of semiconductor fabrication equipment, serving manufacturers of semiconductor wafers, integrated circuits, LCD panels, solar photovoltaic cells, and other electronic devices.

Shares of this top semiconductor and display equipment manufacturer have underperformed the broader market over the past year. AMAT has gained 23.9% over this time frame, while the broader S&P 500 Index ($SPX) has rallied nearly 35.5%. In 2024, AMAT stock is up 13.8%, surpassing the SPX’s 25.5% rise on a YTD basis.

Zooming in further, AMAT has also lagged behind the VanEck Semiconductor ETF . The exchange-traded fund has gained about 60.1% over the past year and 44% returns in 2024.

Applied Materials shares dropped 10.1% in October, following weak bookings reported by industry peer ASML Holding N.V. and an investigation into unsanctioned sales to China.

Moreover, AMAT fell over 2% on Nov. 11, along with other chip stocks, contributing to a decline in the Nasdaq 100.

For the current fiscal year, which ended in October, analysts expect AMAT’s EPS to grow 5.7% to $8.51 on a diluted basis. The company’s earnings surprise history is solid, as it surpassed the consensus estimate in each of the last four quarters.

Among the 33 analysts covering AMAT stock, the consensus rating is a “Moderate Buy.” That’s based on 20 “Strong Buy” ratings, two “Moderate Buys,” and 11 “Holds.”

This configuration is less bullish than two months ago, with 21 analysts suggesting a “Strong Buy” for the stock.

On Nov. 12, Stifel Financial Corp. lowered its price target for Applied Materials from $270 to $250 while maintaining a “Buy” rating ahead of the fiscal Q4 report on November 14. The firm kept its near-term estimates steady and expects Q4 results and Q1 guidance to meet or slightly exceed expectations. However, Stifel adjusted its 2025 estimates downward, focusing on Applied’s outlook for China revenue amid a revised view on WFE growth.

The mean price target of $234.13 represents a 25.5% premium to AMAT’s current price levels. The Street-high price target of $280 suggests an ambitious upside potential of 50%.

On the date of publication, Kritika Sarmah did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. For more information please view the Barchart Disclosure Policy here.