Very little debt to repay and plenty of cash on hand, so it is hard to shake.
Metrics · D/E ~26% · Current Ratio 2.42
💲Is the price expensive now?
On the expensive side
Even accounting for growth expectations, the price is set high.
Metrics · P/E 46.1 · P/B 16.6
💡The broadest front-end equipment maker: 29.6% margin, 41.1% ROE, solid balance sheet (0.26x D/E). But its 46.1x P/E tops its 10-year range of 11-27.
Compiled from public financial data. Not a recommendation to buy or sell any security. · Source: stockanalysis (margins, ROE, P/B are TTM) · P/E on the 8/13 close, as of 2026-08-13
Business Summary · Key Value Metrics
The broadest front-end semiconductor equipment maker. It dominates thin-film deposition and also covers etch, ion implantation, CMP, and metrology. Its service arm (AGS) brought in $6.4B in FY2025, two-thirds of it subscriptions. Q3 FY2026 (ended 7/26) set records: revenue $9.12B (+25%) at a 33.7% GAAP operating margin. TTM revenue $30.8B, 29.6% operating margin.
Applied Materials' moat is the widest process portfolio in front-end equipment plus a large installed-base service business. It leads thin-film deposition while also covering etch, ion implantation, CMP, and metrology, letting customers consolidate multiple process steps with one vendor. Its service arm (AGS) generated $6.4B in FY2025, about 23% of revenue, with two-thirds from subscriptions, and becomes entirely recurring from Q1 FY2026. A 29.6% TTM operating margin backs this up (source: company IR, SEC EDGAR).
Widest Process Coverage
Deposition leadership plus etch, ion implantation, CMP, and metrology — the broadest front-end portfolio.
Installed-Base Service
FY2025 AGS revenue of $6.4B, two-thirds subscriptions, cushioning the equipment cycle.
Co-Development With Customers
Tools are developed alongside customer production processes, carrying adoption through node transitions.
R&D Scale
Development spending funded by a $28B revenue base raises the barrier for late entrants.
10-Year Financial Trends
Revenue compounded at +11.3% over nine years (FY2016 $10.8B to FY2025 $28.4B), operating income at +16.2%, and diluted EPS at +21.2% as buybacks cut the share count by 28%. FY2025 net income of $7.00B was held down by one-time tax items including a $659M deferred-tax remeasurement. Q3 FY2026 (ended 7/26) set records: revenue $9.12B (+25%), a 33.7% GAAP operating margin, and GAAP EPS of $3.17 (+43%), with DRAM rising from 22% to 26% of systems revenue on HBM demand. Q4 guidance was raised to $10.25B. TTM net income is $9.27B, diluted EPS $11.60 (source: SEC EDGAR 10-K, company IR).
10-Year Growth
Revenue$28.4B · CAGR +11.3%
Operating Income$8.3B · CAGR +16.2%
EPS$8.66 · CAGR +21.2%
10-Year Valuation
P/E (year-end)26.9x · avg 17.9x
ROE34.3% · avg 38.7%
Operating Margin29.2% · avg 26.9%
📊 Annual Data Table (AMAT) — expand/collapse
Year
Revenue (B$)
Op. Income (B$)
EPS ($)
P/E (x)
ROE (%)
Op. Margin (%)
2016
10.83
2.15
1.54
18.88
23.2
19.9
2017
14.7
3.94
3.25
17.36
36.5
26.8
2018
16.7
4.49
2.96
11.11
44.4
26.9
2019
14.61
3.35
2.86
18.97
32.9
22.9
2020
17.2
4.37
3.92
15.11
34.2
25.4
2021
23.06
6.89
6.4
21.35
48.1
29.9
2022
25.79
7.79
7.44
11.87
53.5
30.2
2023
26.52
7.65
8.11
16.32
41.9
28.9
2024
27.18
7.87
8.61
21.09
37.8
28.9
2025
28.37
8.29
8.66
26.92
34.3
29.2
— = no data for that year/metric (P/E omitted before EPS turned positive)
9-Year CAGR: Revenue +11.3% · Operating Income +16.2% · Net Income +16.9% · EPS +21.2%
Source: SEC EDGAR 10-K (revenue, operating income, net income, diluted EPS, equity, income tax); October-end closes from Yahoo Finance; TTM metrics from stockanalysis. The fiscal year ends in October, and computed P/E matches stockanalysis figures within 2.6% across the five overlapping years.
Mega-Cap Value Metric Comparison
AMAT has the largest revenue of the three equipment makers (TTM $30.8B) but a lower 29.6% operating margin and 41.1% ROE than Lam Research (35.3%, 65.1%) and KLA (41.7%, 87.5%). In exchange, its 46.1x P/E is the lowest of the three. The higher ROEs at Lam and KLA owe much to buybacks shrinking their equity base (source: stockanalysis, company filings).
Valuation Above Its Own Historical High— A 46.1x P/E sits well above its 10-year fiscal-year-end range of 11.1-26.9, even after a 28% fall from the 52-week high of $739.67. Price relative to earnings is at a historical extreme, leaving room for further de-rating.Source: SEC EDGAR, Yahoo Finance
●
Record Results, Negative Price Reaction— Q3 revenue of $9.12B (+25%) and EPS of $3.17 (+43%) beat consensus and Q4 guidance was raised to $10.25B, yet the stock fell 2.5% on the day and slipped further after hours. That pattern says the good news was already in the price — from here the company has to keep clearing raised expectations for the stock to hold.Source: Company IR (8-K), stockanalysis
●
China Exposure and Export Controls— China was 28% of revenue ($2.51B) in Q3 FY2026, still the largest region. That is down from 35% a year earlier, but tighter US export controls on semiconductor equipment would hit directly.Source: Company IR
✦ ValueCrab Dashboard PreviewAMAT $534.54 -2.48% · as of 2026-08-13
Q. What are Applied Materials' (AMAT) key value-investing metrics?P/E (TTM) 46.1, operating margin 29.6%, ROE 41.1%, net margin 30.1%, debt/equity 0.26x, and a 9-year revenue CAGR of +11.3% (source: stockanalysis, SEC EDGAR, as of 2026-08-13).
Q. What should you look at when evaluating a semiconductor equipment company?The WFE (front-end equipment) investment cycle, and how much recurring service and parts revenue cushions that cycle. AMAT has the broadest front-end tool portfolio, and its service arm (AGS) was about 23% of FY2025 revenue with two-thirds from subscriptions. The data question is how well that recurring base defends a downturn.
Q. Is a 46x P/E too expensive?On the numbers, yes. Its own 10-year fiscal-year-end P/E range is 11.1-26.9, against 46.1x today. The gap opened because the share price rose faster than earnings, not because earnings shrank. This is informational and not a recommendation to buy or sell.
Q. Record results — so why did the stock fall?Q3 was a record on every line: revenue $9.12B (+25%), EPS $3.17 (+43%), and raised Q4 guidance. The stock still closed down 2.5%. That reaction usually means the good news was already priced in. After more than tripling from the 52-week low of $154, expectations themselves have moved up.