Very little debt to repay and plenty of cash on hand, so it is hard to shake.
Metrics · D/E ~30% · Current Ratio 2.51
💲Is the price expensive now?
On the expensive side
Even accounting for growth expectations, the price is set high.
Metrics · P/E 44.8 · P/B 15.8
💡The broadest front-end equipment maker: 30.3% margin, 39.7% ROE, solid balance sheet (0.30x D/E). But its 44.8x P/E tops its own 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 7/28 close, as of 2026-07-28
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 — the widest process portfolio in front-end equipment. Its service arm (AGS) brought in $6.4B in FY2025, two-thirds of it subscriptions. TTM revenue $29.0B with a 30.3% 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 30.3% 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 diluted share count from 1.12B to 0.81B (-28%). Revenue growth over the last three years, however, was a modest +3%, +2%, and +4%. FY2025 net income of $7.00B was held down by one-time tax items including a $659M remeasurement of deferred tax assets tied to new Singapore tax incentive agreements; TTM net income is $8.51B with diluted EPS of $10.65 (source: SEC EDGAR 10-K, company IR).
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 $29.0B) but a lower 30.3% operating margin and 39.7% ROE than Lam Research (34.3%, 66.8%) and KLA (41.7%, 95.0%). In exchange, its 44.8x 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 44.8x P/E sits well above its 10-year fiscal-year-end range of 11.1-26.9, even after a 36% 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
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Cooling Semiconductor Capex Cycle— Equipment stocks sold off broadly after the late-June 2026 all-time high. Slowing advanced-node order momentum, SK Hynix pacing its HBM expansion, a Morgan Stanley downgrade to Hold ($502 target), and insider selling including by the CEO all landed together. Equipment is a cyclical business, so customer capex cuts feed straight into revenue.Source: Industry press, stockanalysis
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China Exposure and Export Controls— China accounted for 28% of systems and service revenue in FY2025. Tighter US export controls on semiconductor equipment would hit directly; restricted revenue runs at roughly 25-29% of quarterly revenue.Source: Company IR
✦ ValueCrab Dashboard PreviewAMAT $476.46 -7.82% · as of 2026-07-28
Q. What are Applied Materials' (AMAT) key value-investing metrics?P/E (TTM) 44.8, operating margin 30.3%, ROE 39.7%, net margin 29.3%, debt/equity 0.30x, and a 9-year revenue CAGR of +11.3% (source: stockanalysis, SEC EDGAR, as of 2026-07-28).
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 44x P/E too expensive?On the numbers, yes. Its own 10-year fiscal-year-end P/E range is 11.1-26.9, against 44.8x 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. It's down 36% from the high — does that make it cheap?It has fallen a long way from the peak, yet measured against its own history it still sits in its most expensive range. The decline also came from a sector-wide equipment sell-off and profit-taking rather than any deterioration in results. This stock is a clean illustration that "down a lot" and "cheap" are different things.