Applied Materials closed at $484.19 on August 24, 2026, giving the company a market cap of around $391 billion. The stock is trading well below its 52-week high of $739.67, hit in June 2026, after a sharp correction pulled it into the low $430s before a partial recovery.
The drop works out to roughly 34% from peak. That kind of pullback naturally raises the question of whether the underlying business has weakened, or whether the stock just got ahead of itself.
The business, by most measures, looks healthy.
Q3 fiscal 2026 revenue came in at a record $9.1 billion, up 15% sequentially and 25% year over year. Adjusted EPS rose 41% year over year to $3.50. Adjusted operating margin expanded to a record 34%.
Management then guided Q4 revenue to $10.25 billion, a figure that came in above what analysts had been expecting. That upward revision forced consensus estimates higher after the print.
The growth is largely tied to AI infrastructure spending. Hyperscale data center operators and leading foundries are expanding capacity for high-performance compute, and that requires more semiconductor manufacturing equipment.
Applied Materials sits squarely in that spending path. Its deposition and etch systems are critical to building the advanced chip structures used in AI accelerators and leading-edge GPUs.
In July 2026, the company launched a new suite of semiconductor manufacturing systems targeting next-generation AI chip production, including enhancements for HBM and advanced 3D packaging. One of those systems reduces fab footprint by 20% while improving transistor performance.
Advanced packaging, leading-edge foundry-logic, and DRAM are expected to account for more than 80% of the year-over-year growth in wafer fab equipment spending in 2026. Applied Materials now expects its advanced packaging revenues alone to grow more than 70% this year.
Most leading-edge logic and DRAM facilities are currently running at high utilization. Demand in AI-related applications like power and optical chips also remains strong.
It is not just the top line. Adjusted gross margin rose to 50.4% in Q3, and the company’s value-based pricing strategy is letting it capture higher prices across new and existing products.
General and administrative expenses fell to their lowest share of operating expenses in the company’s history, a sign that the business is generating more efficiency as it scales.
The Zacks consensus estimate puts fiscal 2026 earnings growth at 35% year over year, followed by 43% growth in fiscal 2027. Earnings estimates for both years have been revised upward over the past week.
Year to date, AMAT is up 91.1%, compared to 25.4% for the broader semiconductors industry.
The 39 analysts covering the stock carry an average 12-month price target of $641.03. The range runs from $358 on the low end to $900 at the high. The overall analyst consensus rating is Strong Buy.
The stock last closed at $484.19 on August 24, 2026.
The post Applied Materials (AMAT) Stock Is Down 34% From Its High. Analysts Still See 32% Upside From Here appeared first on CoinCentral.
