Applied Materials (AMAT) stock tumbled on Aug. 14 after the semiconductor equipment maker reported lower-than-expected revenue for its third financial quarter.
AMAT posted better-than-expected earnings of $3.50 on a per-share basis for its fiscal Q2, but a 25% year-over-year increase in revenue to $9.12 billion came in shy of the $9.18 billion that analysts had forecast.
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Following the post-earnings dip, Applied Materials shares are down nearly 32% versus their year-to-date high.
www.barchart.comOptions Pricing Remains Bullish for AMAT Shares
Despite the revenue miss, options traders remain undeterred, believing the recent slide has actually created a buying opportunity in AMAT shares.
The put-call ratio on contracts expiring mid-September sits at 0.93 currently, indicating a bullish skew.
And the upper price on those contracts, according to Barchart’s data, is set at $560 as of writing, signaling potential for a more than 11% rally over the next 4-5 weeks.
On the flip side, however, Applied Materials crashed through its 20-day moving average (MA) on Friday, indicating the bearish momentum could sustain in the near term.
What Makes Applied Materials Stock Worth Owning
Despite short-term volatility, options market sentiment remains anchored to AMAT’s strong long-term fundamentals and stellar forward outlook.
For Q4, the semiconductor giant guided for at least $9.75 billion in revenue, handily surpassing the $9.6 billion consensus. Adjusted EPS is also seen coming in at a robust $4.02.
Management’s optimism is based on booming AI-driven demand, with advanced packing revenue set to climb over 70% this year. Citing extended customer visibility, it also signaled plans to double manufacturing capacity by 2028.
That said, Applied Materials is currently trading at a forward price-earnings (P/E) ratio of over 44x, which makes it more expensive to own than its equipment manufacturer peers like ASML (ASML) at just over 40x.
What’s the Consensus Rating on Applied Materials?
Despite recent declines, Applied Materials is trading at nearly 2x the price at which it started 2026. Still, Wall Street analysts remain bullish, especially since it pays a dividend yield of 0.42% as well.
The consensus rating on AMAT stock sits at “Strong Buy” currently with the mean price target of nearly $635 indicating potential for a significant rally through year-end.
www.barchart.com On the date of publication, Wajeeh Khan did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. For more information please view the Barchart Disclosure Policy here.
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