Is Applied Materials Stock Underperforming the | U.S. Markets

Santa Clara, California-based Utilized Supplies, Inc. (AMAT) gives manufacturing tools, companies and software program to the semiconductor, show and associated industries. With a market cap of $128.4 billion, Utilized Supplies operates by way of Semiconductor Methods, Utilized World Companies, and Show and Adjoining Markets segments.

Firms price $10 billion or more are typically described as “large-cap stocks,” Utilized Supplies suits proper into that class, with its market cap exceeding this threshold, reflecting its substantial measurement and affect within the semiconductor tools & supplies industry. AMAT is the chief in supplies engineering options used to provide nearly each new chip and superior show within the world.

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Regardless of its notable strengths, AMAT has slipped 38.2% from its all-time high of $255.89 touched on Jul. 10, 2024. AMAT stock has plunged 7.7% over the previous three months underperforming the Nasdaq Composite’s ($NASX) 1.1% dip during the identical time body.

Over the long run, AMAT’s efficiency appears to be like even grimmer. AMAT has plummeted practically 20% over the previous 52 weeks and 18.1% over the previous six months, underperforming the NASX’s 18.2% positive aspects over the previous yr and seven.4% positive aspects over the previous six months.

To verify the downturn, AMAT stock has remained under its 50-day transferring average since mid-July 2024 and under its 200-day transferring average since mid-October 2024 with slight fluctuations.

Regardless of delivering better-than-expected outcomes, Utilized Supplies’ stock plunged 8.2% within the trading session after the release of its Q1 outcomes on Feb. 13. The company reported a notable 6.8% year-over-year growth in web revenues to $7.2 billion, exceeding the Road’s expectations by 18 foundation factors. In the meantime, its adjusted EPS elevated 11.7% year-over-year to $2.38, surpassing the consensus estimates by 4.4%. Moreover, the company noticed notable enchancment in margins with its adjusted gross margin increasing 1% in comparison with the year-ago quarter to 48.9% and its adjusted working margin increasing 1.1% to 30.6%.

Nonetheless, the company noticed a large drop in money flows, its non-GAAP free money move for the quarter dropped by a staggering 74% year-over-year to $544 million. Furthermore, in Q2, the company expects its adjusted gross margin to contract 50 foundation factors quarter-on-quarter to 48.4%, which unsettled investor confidence.

Utilized Supplies has additionally underperformed its peer Lam Analysis Company’s (LRCX) 16.8% decline over the previous 52 weeks and a 4.7% dip over the previous six months.

Nonetheless, analysts stay optimistic concerning the company’s prospects. Among the many 34 analysts masking the AMAT stock, the consensus ranking is a “Moderate Buy.” Its imply price goal of $209.91 signifies a notable 32.8% upside potential from present price ranges.

On the date of publication, Aditya Sarawgi didn’t have (both immediately or not directly) positions in any of the securities talked about on this article. All data and information on this article is solely for informational functions. For more data please view the Barchart Disclosure Coverage right here.

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The views and opinions expressed herein are the views and opinions of the writer and don’t essentially mirror these of Nasdaq, Inc.