Applied Materials (AMAT)
Technology · NASDAQ · US
Fundamentals
Valuation and ratings
Applied Materials trades at $579.43, which is 30% above the $408.10 our discounted cash flow model puts on the business. On that measure it screens as expensive, which is not the same as saying it will fall.
Our moat model scores it 92 out of 100, which is a wide moat. A moat is a structural reason competitors cannot take the profits away, and it matters more to a long holding period than any single quarter's numbers do.
It changes hands at 56.8 times earnings. Be careful reading that in isolation: for a cyclical business a low P/E arrives at the top of the cycle, when profits are peaking and about to fall, which is exactly when the shares look cheapest and are not.
About Applied Materials
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. The company operates through Semiconductor Systems and Applied Global Services (AGS) segments. The Semiconductor Systems segment includes semiconductor capital equipment to enable materials engineering steps, including etch, rapid thermal processing, deposition, chemical mechanical planarization, metrology and inspection, wafer packaging, and ion implantation. The AGS segment offers integrated solutions to optimize equipment and fab performance and productivity comprising spares, upgrades, services, and 200 millimeter and other equipment and factory automation software for semiconductor and other products. It serves manufacturers of semiconductor wafers and chips, and other electronic devices. Applied Materials, Inc. was incorporated in 1967 and is headquartered in Santa Clara, California.
AMAT passes 5 of our 30 screens today
Each screen prints the exact criteria it used, and the circumstances in which it is wrong.
Smart money ownership
34 of the funds we track reported a position in their latest SEC 13F filing. Largest first:
- Capital Research Global, Capital Research Global Investors$10.07B · 1.6% of book
- Lewis Sanders, Sanders Capital, LLC$2.11B · 2.5% of book
- Philippe Laffont, COATUE MANAGEMENT LLC$1.79B · 6.2% of book
- William Von Mueffling, CANTILLON CAPITAL MANAGEMENT LLC$1.04B · 3.5% of book
- Parnassus Investments, PARNASSUS INVESTMENTS, LLC$1.02B · 3.0% of book
A word of warning on reading these figures: a 13F reports the market value of a holding, so a fund that traded nothing at all still appears to have sold when the price fell. We found 102 companies where the standard reading gives the opposite answer. Only the share count is honest.
Common questions
Is Applied Materials (AMAT) undervalued?
Against our discounted cash flow estimate of $408.10, AMAT at $579.43 is 30% above fair value. That is one model's answer, not a recommendation, and most of a DCF's output sits in a terminal value nobody can forecast.
Which funds own AMAT?
34 of the institutions we track reported a position in AMAT in their most recent SEC 13F filing. A 13F is filed up to 45 days after quarter end, so it tells you what a fund held then, not what it holds now.
What is AMAT's P/E ratio?
AMAT trades at 56.8 times earnings. A low P/E is not automatically cheap: on a cyclical company it is usually a warning that earnings are at a peak.
The full research page for AMAT, with financial statements, ownership detail, peer comparison and alerts, is free inside the app.
Data from company filings, exchange quotes and SEC EDGAR 13F disclosures. Quotes are delayed. Metrics we do not have are left out rather than estimated. Educational information, not financial advice.