US Equities Analysis

AMAT — Applied Materials

Research evidence pack

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2. Company Fundamentals

2.1 Competitiveness

Metric Value
Operating Margins 31.9%
Profit Margins 29.31%
Return on Equity 39.69%
Return on Assets 14.86%
Free Float 0.79B
Dividend Yield 0.34%
Short Int % Utilisation 2.52%

2.2 Growth

Metric Value
Revenue Growth 11.4%
Free Cash Flow 3.04B
EBITDA 42.44 (Ratio)
Enterprise Value 393.63B
EV/Revenue 13.56
EV/EBITDA 42.44

Revenue growth of 11.4% indicates steady, moderate expansion.

2.3 Management

Role Metric
Consensus Rating N/A

2.4 Return

Metric Value
Expected Return (Ann.)* 277.68%
Risk / Std Dev (Ann.)* 58.71%
1-Year Price Return* 215.84%

Latest Market Data (as of 2026-08-14, US Eastern time):

Metric Value
Last Price $507.18
52-Week Range $154.47 – $739.67
Observation Count 251 trading days

The return and risk statistics use daily adjusted closes from the retrieved one-year series and annualise daily moments using 252 trading days. The last price is the latest regular-market price reported for the stated date. Source: Yahoo Finance market data.

2.5 FCFF DCF Valuation

Valuation basis: This research model follows a five-year, unlevered FCFF DCF. It starts from reported annual operating inputs, forecasts revenue and operating cash conversion under an explicit mechanical policy, discounts FCFF at WACC, applies a Gordon-growth terminal value, and bridges enterprise value to an indicative common-equity value per share. It is an analytical estimate rather than a recommendation or personalised target price.

Step 1 — Forecast Operating Profit and NOPAT

Reported operating input Value
Revenue $28.37B
Prior annual revenue $27.18B
EBIT $9.54B
Tax rate 24.50%
NOPAT = EBIT × (1 − tax rate) $7.20B
Forecast start-growth basis 4.39%
Forecast policy latest reported annual revenue growth, bounded to -10.00% / 15.00%

Step 2 — Calculate FCFF

Current FCFF building block Value
NOPAT $7.20B
Add: depreciation & amortisation $435.00M
Less: capital expenditure -$2.26B
Less/(add): working-capital cash-flow movement -$200.00M
Current unlevered FCFF $5.18B

Explicit FCFF forecast

Forecast year Revenue growth NOPAT D&A Capex Change in NWC FCFF Present value
1 4.39% $7.52B $454.08M -$2.36B -$208.77M $5.40B $5.07B
2 3.91% $7.81B $471.86M -$1.96B -$216.95M $6.11B $5.06B
3 3.44% $8.08B $488.10M -$1.51B -$224.41M $6.83B $4.99B
4 2.97% $8.32B $502.61M -$1.03B -$231.08M $7.56B $4.87B
5 2.50% $8.53B $515.17M -$515.17M -$236.86M $8.29B $4.70B

Step 3 — Determine the Discount Rate (WACC)

WACC input Value
Risk-free rate 4.71%
Equity risk premium assumption 5.50%
Beta 1.62
Cost of equity 13.61%
Pre-tax cost of debt 3.94%
WACC 13.43%
WACC validation within standard range

Step 4 — Estimate Terminal Value

Terminal-value input Value
Perpetuity growth rate 2.50%
Terminal value $77.79B
Implied terminal EV / EBITDA 6.58x
Terminal value as % of enterprise value 62.66%

Step 5 — Discount Cash Flows to Enterprise Value

Enterprise-value component Value
Present value of explicit FCFF $24.69B
Present value of terminal value $41.43B
Indicated enterprise value $66.12B
Discounting convention mid-year for explicit FCFF; terminal value discounted at year-end five

Step 6 — Convert Enterprise Value to Equity Value

Equity bridge Value
Indicated enterprise value $66.12B
Less: gross interest-bearing debt $7.05B
Add: cash and equivalents $8.57B
Add: affiliate investments $0.00
Less: minority interests $0.00
Indicated common equity value $67.65B

Step 7 — Calculate Indicative Value Per Share

Per-share output Value
Shares used 808,000,000.00
Share-count basis reported diluted weighted-average shares
Current market price $505.88
DCF indicative value per share $83.72
Indicative value vs. market price -83.45%

Model Integrity Checks

Check Result
Perpetuity growth is below the risk-free rate pass
Perpetuity growth is below WACC pass
WACC is within the configured operating-company range pass
Terminal-year FCFF is positive pass
Terminal capex converges to D&A pass
Terminal-value concentration within review band
Implied price differs from spot by more than 30% review required

2.6 Investor-Style Research Screen

Educational screen Result
Buffett-inspired cash-quality checks 3/4 evidenced checks
Lynch-inspired balance-and-growth checks 4/4 evidenced checks

Data lineage: Yahoo Finance public market and reported-statement data; retrieval timestamp: 2026-08-18 17:22:00.112378 UTC; latest reported fiscal period: 2025-10-31 00:00:00. Default assumptions: five-year forecast, mid-year discounting for explicit FCFF, a maximum 2.50% perpetuity-growth rate below both WACC and the risk-free rate, historical operating-ratio persistence, and capex convergence to D&A by year five. No sell-side consensus or management guidance is substituted for reported inputs. This is research and analysis only, not personalized financial advice.

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