Update shared on04 Sep 2025
Applied Materials’ consensus price target remains unchanged at $194.58, as analysts weigh near-term earnings headwinds from China-related volatility and export restrictions against long-term strength in AI-driven demand and wafer fab investments.
Analyst Commentary
- Consensus among analysts is that Applied Materials’ near-term earnings outlook is weaker than expected due to volatility and digestion in China and reduced leading-edge foundry/logic spending, with guidance for the October quarter notably below consensus.
- U.S. government export restrictions to China and China’s drive for semiconductor self-sufficiency are key headwinds, resulting in customer pull-ins, share pressure in China, and increased competition in core product segments.
- Several analysts cite secular growth drivers for Applied Materials, including leadership in leading-edge foundry/logic and DRAM/HBM, and believe the company remains well positioned for long-term wafer fab equipment (WFE) investment cycles, especially as AI and high-bandwidth memory trends advance.
- Bullish analysts argue weakness is transitory, and advocate buying on the selloff, expecting better risk/reward and a sales rebound as Chinese demand stabilizes and end-market mix improves in 2025.
- Bearish analysts are concerned about muted demand in key end markets (PC, smartphone, industrial), ongoing China-related uncertainty clouding earnings visibility, and incremental competitive threats weighing on the company’s mid-term growth outlook.
What's in the News
- Applied Materials faces a lawsuit in the Beijing IP Court from Chinese chip equipment supplier E-Town, which alleges trade secret theft related to plasma technologies and seeks damages of 100 million yuan and destruction of related materials (Bloomberg, Aug 14, 2025).
- The company completed a significant share buyback, repurchasing 6.3 million shares ($1.04 billion) from April 28 to July 27, 2025, bringing the total to 30.9 million shares ($5.14 billion) under its 2023 authorization, while reporting no activity under its 2025 buyback plan.
- Applied Materials is working with Apple and Texas Instruments to strengthen the U.S. semiconductor supply chain, supplying equipment for TI's domestic factories and investing $200+ million to build a new manufacturing facility in Chandler, AZ, potentially adding 200 jobs (Aug 6, 2025).
- The company joined the JOINT3 consortium with Resonac Corporation and 25 other global leaders to develop next-generation panel-level organic interposer technology, supporting advances in semiconductor packaging (Sep 3, 2025).
- Applied Materials was dropped from the Russell Top 50 Index on June 27, 2025, and separately expanded its collaboration with CEA-Leti in France to accelerate R&D in specialty semiconductors for AI and infrastructure markets (June 16, 2025).
Valuation Changes
Summary of Valuation Changes for Applied Materials
- The Consensus Analyst Price Target remained effectively unchanged, at $194.58.
- The Consensus Revenue Growth forecasts for Applied Materials remained effectively unchanged, at 4.3% per annum.
- The Future P/E for Applied Materials remained effectively unchanged, at 20.41x.
Disclaimer
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