Should Applied Materials’ (AMAT) Steady Dividend Hikes and Buybacks Shape Long‑Term Capital Allocation Views?

• Applied Materials recently announced that its Board of Directors approved a quarterly cash dividend of US$0.46 per share, payable on March 12, 2026 to shareholders of record as of February 19, 2026.
• This payout, marking eight consecutive years of dividend increases and following nearly US$6.30 billion returned to shareholders in fiscal 2025 with about US$14.00 billion still authorized for buybacks, underscores how shareholder returns have become a central pillar of Applied Materials’ capital allocation approach.
• Next, we’ll examine how this sustained dividend growth and sizable remaining buyback capacity feed into Applied Materials’ investment narrative.

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Applied Materials Investment Narrative Recap

To own Applied Materials, you need to believe that AI-driven chip demand and global fab buildouts will keep rewarding its core equipment and services portfolio, despite cyclicality and export risks. The new US$0.46 dividend affirmation supports the existing investment case but does not materially change the key near term catalyst, which remains AI and advanced-node spending, or the biggest current risk around China-related export controls and license uncertainty.

Among the recent developments, TD Cowen naming Applied Materials its “Top 2026 Idea” on expected strength in DRAM and leading edge foundry spending directly ties into that same AI infrastructure catalyst, reinforcing why the company’s growing capital returns may appeal to investors watching equipment demand. Together, the dividend increase track record and the bullish foundry and memory outlook frame how some investors think about balancing upside potential with policy and customer concentration risks.

Yet while shareholder payouts look appealing, investors should be aware that tightening China export rules could...

Read the full narrative on Applied Materials (it's free!)

Applied Materials’ narrative projects $32.5 billion revenue and $9.2 billion earnings by 2028. This requires 4.3% yearly revenue growth and about a $2.4 billion earnings increase from $6.8 billion today.

Uncover how Applied Materials' forecasts yield a $241.69 fair value, a 7% downside to its current price.

Exploring Other Perspectives

Nineteen Simply Wall St Community fair value estimates for Applied Materials span about US$146 to US$247 per share, showing how far apart individual views can be. You are weighing those opinions against catalysts tied to AI driven DRAM and foundry spending that could influence how the business performs over time.

Explore 19 other fair value estimates on Applied Materials - why the stock might be worth as much as $247.37!

Build Your Own Applied Materials Narrative

Disagree with existing narratives? Create your own in under 3 minutes - extraordinary investment returns rarely come from following the herd.

• A great starting point for your Applied Materials research is our analysis highlighting 3 key rewards and 1 important warning sign that could impact your investment decision.
• Our free Applied Materials research report provides a comprehensive fundamental analysis summarized in a single visual - the Snowflake - making it easy to evaluate Applied Materials' overall financial health at a glance.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

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