NASDAQ · Technology

Applied Materials, Inc.

AMAT · Semiconductor Equipment & Materials

$617.11

▲ 24.19 (4.08%)

Cached · 10 min

Overall Grade

Defensive

Enterprising

Profitability

A⤢

Gross Profit Margin 49.9%

Operating Margin 31.9%

Net Income Margin 35.5%

Fin. Health

A⤢

Years to Pay Off Debt 2.6 yrs

Working Capital vs Long-Term Debt $8.3B

Working Capital $13.6B

Valuation

F⤢

Margin of Safety 0.0%

Price-to-Book 20.49x

Cash Flow

B⤢

Free Cash Flow $210M

CapEx % of Net Income 22.6%

Owner Earnings $3.6B

Profitability

Gross Profit Margin 49.9%

Revenue minus cost of goods sold. Graham's ≥40% threshold identifies businesses with durable pricing power. Note: software and financial companies naturally exceed this; retailers and manufacturers rarely reach it due to their cost structures.

Operating Margin 31.9%

Profit after operating costs before interest and taxes. A consistent ≥15% operating margin signals a business with real competitive advantages. Capital-intensive industries (airlines, auto, commodities) rarely hit this threshold due to their structural cost base — compare within industry for context.

Net Income Margin 35.5%

Bottom-line profit as a percentage of revenue. The ≥20% target reflects Buffett's preference for highly profitable businesses. Financial engineering (buybacks, tax optimisation) can inflate this temporarily — look for consistency across multiple years rather than a single strong result.

Financial Health

Years to Pay Off Debt 2.6 yrs

Total Debt ÷ Net Income. Lower = stronger balance sheet. Important caveat: utilities, telecoms, REITs, and infrastructure companies carry large structural debt by design — their bond-like cash flows service it comfortably at ratios that would alarm Graham. Compare within sector.

Working Capital vs Long-Term Debt $8.3B

Working Capital minus Long-Term Debt. Negative results are common and expected in capital-return-focused businesses like Apple, Domino's, and McDonald's — where aggressive buybacks and dividends intentionally reduce book equity. This does not indicate financial distress in high-FCF businesses.

Working Capital $13.6B

Current Assets minus Current Liabilities. Negative working capital can be a deliberate efficiency strategy in businesses that collect cash before paying suppliers (retailers, fast food franchises, subscription businesses). Assess alongside free cash flow generation for full context.

Cash Flow

Free Cash Flow $210M

Operating cash flow minus capital expenditures. Buffett's most important metric — cash a business actually generates for its owners after maintaining and growing its asset base. Consistently positive FCF is one of the strongest indicators of a durable, well-run business regardless of accounting profits.

CapEx % of Net Income 22.6%

Capital expenditure as a share of net income. Low CapEx signals a capital-light business that doesn't need heavy reinvestment to sustain earnings — Buffett's ideal. High CapEx is structurally necessary in manufacturing, airlines, telecoms, and semiconductors. For these industries, a high reading reflects the business model, not poor management.

Owner Earnings $3.6B

Net Income + Depreciation & Amortisation − Capital Expenditures. Buffett's preferred measure of a company's true annual earning power — what could theoretically be distributed to owners without impairing the business. More reliable than reported EPS because it accounts for the capital cost of maintaining the business.

Defensive — Graham's strict criteria (P/B, P/E, dividends, stability) · Enterprising — Profitability & cash flow focused, accepts higher valuations for quality

About Applied Materials, Inc.

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.

Market Data

Market Cap $490.0B

Enterprise Value $450.2B

P/E (TTM) 58.05

Dividend Yield 0.32%

Exchange NASDAQ

Key Margins

Gross Profit 49.9%

Operating Margin 31.9%

Net Margin 35.5%

Company Info

Sector Technology

Industry Semiconductor Equipment & Materials

Employees 36400

Country United States

Visit website

📖

Full Graham Analysis

Mr. Market is currently offering Applied Materials, Inc. at $617.11.

The business passes only 3 of 6 of Graham's defensive criteria — well below his required standard.

At $617.11, the stock trades at a 1165% premium to its Graham Number of $48.77. Graham would consider this price speculative.

There is no margin of safety at the current price. Graham would advise patience and waiting for a better entry point.

Trading at 79.1x NCAV. Expected for most quality businesses — NCAV was designed to find depression-era bargains and rarely applies to modern profitable companies..

Conclusion: By Graham's standards, this stock is speculative at its current price. The intelligent investor would look elsewhere or wait.

Showing Key Metrics

Income Highlights

Metric	Q2 2026	Q4 2025
Gross Profit %	49.9%▲	48.0%
Operating Margin %	31.9%▲	27.8%
Net Income %	35.5%▲	27.9%
Diluted EPS	3.51▲	2.38

Balance Sheet Highlights

Metric	Q2 2026	Q4 2025	Q4 2024
Total Assets	$40.3B	$36.3B	N/A
Total Debt	$7.3B▲	$7.0B•	N/A
Working Capital	$13.6B▲	$12.9B•	N/A
Years to Pay Debt	2.59	3.72	N/A

Cash Flow Highlights

Metric	Q2 2026	Q4 2025	Q4 2024
Free Cash Flow	$210M▼	$2.0B•	N/A
Owner Earnings	$3.6B	$2.8B	N/A
CapEx % of Net Income	22.6%	41.4%	N/A

Income Statement

	2026	2025
Tax Effect Of Unusual Items	0	0
Tax Rate For Calcs	0	0
Normalized EBITDA	3,429,000	2,452,000
Total Unusual Items	0
Total Unusual Items Excluding Goodwill	0
Net Income From Continuing Operation Net Minority Interest	2,806,000	1,897,000
Reconciled Depreciation	135,000	114,000
Reconciled Cost Of Revenue	3,963,000	3,535,000
EBITDA	3,429,000	2,452,000
EBIT	3,294,000	2,338,000
Net Interest Income	702,000	555,000
Interest Expense	69,000	71,000
Interest Income	771,000	626,000
Normalized Income	2,806,000	1,897,000
Net Income From Continuing And Discontinued Operation	2,806,000	1,897,000
Total Expenses	5,387,000	4,907,000
Total Operating Income As Reported	2,523,000	1,712,000
Diluted Average Shares	799,000	798,000
Basic Average Shares	794,000	794,000
Diluted EPS	0	0
Basic EPS	0	0
Diluted NI Availto Com Stockholders	2,806,000	1,897,000
Net Income Common Stockholders	2,806,000	1,897,000
Net Income	2,806,000	1,897,000
Net Income Including Noncontrolling Interests	2,806,000	1,897,000
Net Income Continuous Operations	2,806,000	1,897,000
Tax Provision	419,000	370,000
Pretax Income	3,225,000	2,267,000
Other Income Expense
Special Income Charges	0
Other Special Charges
Restructuring And Mergern Acquisition	0
Net Non Operating Interest Income Expense	702,000	555,000
Interest Expense Non Operating	69,000	71,000
Interest Income Non Operating	771,000	626,000
Operating Income	2,523,000	1,893,000
Operating Expense	1,424,000	1,372,000
Research And Development	1,027,000	917,000
Selling General And Administration	397,000	455,000
Selling And Marketing Expense	233,000	212,000
General And Administrative Expense	164,000	243,000
Other Gand A	164,000	243,000
Gross Profit	3,947,000	3,265,000
Cost Of Revenue	3,963,000	3,535,000
Total Revenue	7,910,000	6,800,000
Operating Revenue	7,910,000	6,800,000

Balance Sheet

	2026	2025	2024
Treasury Shares Number	1,243,000	1,211,000
Ordinary Shares Number	793,959	793,000
Share Issued	2,036,959	2,004,000
Net Debt	154,000
Total Debt	7,268,000	7,050,000
Tangible Book Value	19,755,000	16,482,000
Invested Capital	30,364,000	26,970,000
Working Capital	13,573,000	12,882,000
Net Tangible Assets	19,755,000	16,482,000
Capital Lease Obligations	813,000	495,000
Common Stock Equity	23,909,000	20,415,000
Total Capitalization	29,165,000	26,870,000
Total Equity Gross Minority Interest	23,909,000	20,415,000
Stockholders Equity	23,909,000	20,415,000
Gains Losses Not Affecting Retained Earnings	-124,000	-110,000
Other Equity Adjustments	-124,000	-110,000
Treasury Stock	45,780,000	45,043,000
Retained Earnings	59,274,000	55,227,000
Additional Paid In Capital	10,531,000	10,333,000
Capital Stock	8,000	8,000
Common Stock	8,000	8,000
Total Liabilities Net Minority Interest	16,377,000	15,884,000
Total Non Current Liabilities Net Minority Interest	7,379,000	7,885,000
Other Non Current Liabilities	572,000	519,000
Employee Benefits	148,000	151,000
Non Current Pension And Other Postretirement Benefit Plans	148,000	151,000
Tradeand Other Payables Non Current	704,000	356,000
Long Term Debt And Capital Lease Obligation	5,955,000	6,859,000
Long Term Capital Lease Obligation	699,000	404,000
Long Term Debt	5,256,000	6,455,000
Current Liabilities	8,998,000	7,999,000
Other Current Liabilities			-1,000
Current Deferred Liabilities	2,570,000	2,566,000
Current Deferred Revenue	2,570,000	2,566,000
Current Debt And Capital Lease Obligation	1,313,000	191,000
Current Capital Lease Obligation	114,000	91,000
Current Debt	1,199,000	100,000
Other Current Borrowings	1,199,000		700,000
Commercial Paper		100,000
Pensionand Other Post Retirement Benefit Plans Current	966,000	1,221,000
Current Provisions	23,000	165,000
Payables And Accrued Expenses	4,126,000	3,856,000
Current Accrued Expenses	1,151,000	1,133,000
Payables	2,975,000	2,723,000
Dividends Payable	421,000	365,000
Total Tax Payable	357,000	380,000
Income Tax Payable	357,000	380,000
Accounts Payable	2,197,000	1,978,000
Total Assets	40,286,000	36,299,000
Total Non Current Assets	17,715,000	15,418,000
Other Non Current Assets	1,297,000	806,000
Non Current Deferred Assets	1,047,000	1,233,000
Non Current Deferred Taxes Assets	1,047,000	1,233,000
Investments And Advances	5,142,000	4,327,000
Goodwill And Other Intangible Assets	4,154,000	3,933,000
Other Intangible Assets	330,000	226,000
Goodwill	3,824,000	3,707,000
Net PPE	6,075,000	5,119,000
Accumulated Depreciation	-4,090,000	-3,901,000
Gross PPE	10,165,000	9,020,000
Construction In Progress	1,860,000	1,460,000
Other Properties	3,678,000	3,217,000
Machinery Furniture Equipment	931,000	855,000
Buildings And Improvements	3,137,000	2,930,000
Land And Improvements	559,000	558,000
Current Assets	22,571,000	20,881,000
Other Current Assets	1,176,000	1,060,000
Inventory	6,343,000	5,915,000
Finished Goods	1,277,000	1,208,000
Work In Process	1,109,000	914,000
Raw Materials	3,957,000	3,793,000
Receivables	6,811,000	5,333,000
Taxes Receivable	439,000	148,000
Accounts Receivable	6,372,000	5,185,000
Cash Cash Equivalents And Short Term Investments	8,241,000	8,573,000
Other Short Term Investments	1,940,000	1,332,000
Cash And Cash Equivalents	6,301,000	7,241,000
Cash Equivalents	4,804,000	5,822,000
Cash Financial	1,497,000	1,419,000

Cash Flow

	2026	2025	2024
Free Cash Flow	210,000	2,043,000
Repurchase Of Capital Stock	-400,000	-851,000
Repayment Of Debt	-200,000	-802,000
Issuance Of Debt	100,000	1,094,000
Issuance Of Capital Stock		132,000	124,000
Capital Expenditure	-635,000	-785,000
Interest Paid Supplemental Data	54,000	68,000
Income Tax Paid Supplemental Data	538,000	235,000
End Cash Position	6,359,000	7,312,000
Beginning Cash Position	7,287,000	5,454,000
Changes In Cash	-928,000	1,858,000
Financing Cash Flow	-814,000	-831,000
Cash Flow From Continuing Financing Activities	-814,000	-831,000
Net Other Financing Charges	-80,000	-39,000
Cash Dividends Paid	-365,000	-365,000
Common Stock Dividend Paid	-365,000	-365,000
Net Common Stock Issuance	-269,000	-719,000
Common Stock Payments	-400,000	-851,000
Common Stock Issuance		132,000	124,000
Net Issuance Payments Of Debt	-100,000	292,000
Net Short Term Debt Issuance	-100,000	1,000
Short Term Debt Payments	-200,000	-102,000
Short Term Debt Issuance	100,000	103,000
Net Long Term Debt Issuance		291,000	-90,000
Long Term Debt Payments		-700,000	-90,000
Long Term Debt Issuance		991,000	0
Investing Cash Flow	-959,000	-139,000
Cash Flow From Continuing Investing Activities	-959,000	-139,000
Net Investment Purchase And Sale	-155,000	646,000
Sale Of Investment	2,091,000	1,591,000
Purchase Of Investment	-2,246,000	-945,000
Net Business Purchase And Sale	-175,000	0
Purchase Of Business	-175,000	0
Capital Expenditure Reported	-635,000	-785,000
Operating Cash Flow	845,000	2,828,000
Cash Flow From Continuing Operating Activities	845,000	2,828,000
Change In Working Capital	-1,497,000	1,258,000
Change In Other Working Capital	91,000	96,000
Change In Other Current Liabilities	-16,000	47,000
Change In Other Current Assets	-240,000	-83,000
Change In Payables And Accrued Expense	383,000	719,000
Change In Payable	383,000	719,000
Change In Account Payable	539,000	172,000
Change In Tax Payable	-156,000	547,000
Change In Income Tax Payable	-156,000	547,000
Change In Inventory	-319,000	-108,000
Change In Receivables	-1,396,000	587,000
Changes In Account Receivables	-1,396,000	587,000
Other Non Cash Items	-248,000	508,000
Stock Based Compensation	169,000	156,000
Asset Impairment Charge	-672,000
Deferred Tax	152,000	-313,000
Deferred Income Tax	152,000	-313,000
Depreciation Amortization Depletion	135,000	114,000
Depreciation And Amortization	135,000	114,000
Net Income From Continuing Operations	2,806,000	1,897,000

📊 Quarterly mode — Graham Fair Value & 7 Criteria require annual data. Switch to Annual for full analysis.

Quarter vs Same Quarter Last Year

YoY strips seasonality

Revenue Growth (YoY)

Prior year: $7.1B ▲ $7.9B +11.4%

Revenue growth vs same quarter last year strips seasonality. Consistent double-digit growth is a Buffett hallmark.

Gross Margin

Prior year: 49.1% ▲ 49.9% +0.8pp

Buffett: consistent gross margin above 40% signals durable pricing power and competitive moat.

Operating Margin

Prior year: 35.5% ▲ 31.9% -3.6pp

Graham: operating margin reflects true business economics before financing. Trend matters as much as level.

Net Margin

Prior year: 30.1% ▲ 35.5% +5.4pp

Net margin can be distorted by one-time items, tax timing, or interest costs — compare to operating margin for signal quality.

Quarterly Health Checks

3 Graham/Buffett criteria that are valid and reliable on quarterly data

✅ Adequate Size

Graham required scale for resilience. Quarterly revenue × 4 gives an annualised proxy.

$7.9B/qtr (≈$31.6B ann.)

vs > $1.5B annualised revenue

✅ Financial Condition

Current assets vs current liabilities — a real-time liquidity snapshot. Valid and reliable on quarterly data.

2.51x current ratio

vs ≥ 2.0x

✅ Free Cash Flow

Buffett's most important single metric. A positive FCF quarter means the business generated real cash for owners after maintaining its asset base.

$210M

vs Positive

Operating Cash Flow

$845M

Latest quarter · Buffett's cash reality check

ROIC

6.4%

Based on latest annual operating income

Return on Invested Capital — Buffett's preferred measure for asset-light businesses. ROIC > 15% consistently signals a durable competitive advantage (moat). More meaningful than P/B for software, pharma, and consumer brand companies where most value is intangible and off-balance-sheet.

Market Cap / Net Assets

20.5x

Net Assets: $23.9B

Asset Context — Semiconductor Equipment & Materials

This company's primary assets are likely intangible (brand, IP, talent, network effects) and don't appear on the balance sheet. Net Assets may significantly understate intrinsic value. ROIC and free cash flow are more reliable indicators of business quality.

⚠️ Revenue grew vs prior year but operating margin contracted. Possible explanations: deliberate investment in growth (hiring, marketing, R&D), input cost inflation, or pricing pressure from competition. Buffett distinguishes between spending that builds moat vs. spending that doesn't.

Peers & Industry

No auto-detected peers for Semiconductor Equipment & Materials. You can manually compare AMAT against any stock using the Compare tool.

"The management of a business is its most important single factor — more important than market position, patents, or financial structure."

— Benjamin Graham

Capital Allocation & Alignment

Insider Ownership

0.31%

Low — management has little skin in the game

Return on Equity (ROE)

11.7%

Adequate — returns are moderate

Return on Assets (ROA)

7.0%

Strong — management uses assets efficiently

Share Buybacks (Latest Year)

$4.9B

Management is returning capital to shareholders via buybacks

Debt Trend YoY

+1.1% YoY

Debt is roughly stable

Leadership Team

Gary Dickerson

President, CEO & Executive Director

Age 68

Pay: $2,704,357

0.096% of net income

Brice Hill

Senior VP, CFO & leads Global Information Services

Age 58

Pay: $1,774,802

0.063% of net income

Omkaram Nalamasu Ph.

SVP, CTO, President Applied Ventures, LLC & Chair of the Growth Technical Advisory Board

Age 67

Pay: $1,443,365

0.051% of net income

Prabu Raja Ph.

President of Semiconductor Products Group

Age 62

Pay: $1,872,993

0.067% of net income

Timothy Deane

Senior Vice President of Applied Global Services

Age 59

Pay: $1,614,256

0.058% of net income

Top Institutional Holders

Institution	% Owned	Shares
Blackrock Inc.	9.95%	78,974,833
Vanguard Capital Management LLC	6.50%	51,577,799
State Street Corporation	4.72%	37,506,950
Capital Research Global Investors	3.71%	29,455,424
Geode Capital Management, LLC	2.76%	21,921,798
Vanguard Portfolio Management LLC	2.17%	17,261,696
Morgan Stanley	1.49%	11,843,881
UBS AM, a distinct business unit of UBS ASSET MANAGEMENT AMERICAS LLC	1.26%	9,997,208

Risk Analysis

Beta (Market Risk)

1.67

High volatility — moves more than the market

Short Interest

2.5% of float

Low short interest — market is not heavily bearish

Debt-to-Equity

0.30x

Conservative balance sheet — low financial risk

Current Ratio

2.51x

Strong liquidity — Graham approved

52-Week Price Range

Low: $154.47 Current: $617.11 High: $638.90

Currently at 96% of 52-week range

Applied Materials, Inc.

Metric Explanations

Full Graham Analysis

Income Highlights

Balance Sheet Highlights

Cash Flow Highlights

Quarter vs Same Quarter Last Year

Quarterly Health Checks

Operating Cash Flow

ROIC

Market Cap / Net Assets

Peers & Industry

Capital Allocation & Alignment

Leadership Team

Top Institutional Holders

Risk Analysis