AMAT
APPLIED MATERIALS INC /DE
Technology • CIK: 0000006951
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Market Cap
$257.50B
P/E (TTM)
32.9x
Rev Growth (TTM)
+2.1%
Net Margin (TTM)
27.8%
FCF Yield (TTM)
2.4%
FCF Margin (TTM)
22.0%
What Changed
10-Q Q1 FY2026 vs 10-Q Q3 FY2025
Semiconductor Systems Revenue Growth+10.21%→-8.15%
Semiconductor Systems Segment Margin35.50% (10-K FY2025)→27.80% (Q1 FY2026)
Management Toneconfident→mixed
BIS Export Controls Settlementnone (subpoenas ongoing, no material settlement...→$253M settlement charged in Q1 FY2026
Applied Global Services Revenue Growth+1.27%→+15.22%
Semiconductor Systems revenue growth — monitor Q2 FY2026 for return above 0%;...·BIS settlement follow-on obligations — confirm whether the $253M includes...·China revenue as % of total — track directional change given $253M BIS penalty...
Filing Intelligence
6.0/10
10-Q filed Feb 19, 2026 • Q1 2026
Executive Summary
The company has a $253 million settlement with the BIS for export controls compliance, impacting Q1 fiscal 2026 results.. Semiconductor Systems revenue decreased 8.15% See detailed pass outputs for...
Key Concerns
- ●Overall revenue declined by 2%, but gross margin improved by 0.2 percentage points due to higher average selling prices and lower costs.
- ●The Semiconductor Systems segment experienced a revenue decrease and a significant operating margin decline, while the Applied Global...
- ●The company has a $253 million settlement with the BIS for export controls compliance, impacting Q1 fiscal 2026 results.
Key Strengths
- ●Operating margin decreased significantly due to a $253 million legal settlement charge and increased RD&E expenses, despite gross margin...
- ●Net income and EPS saw substantial increases, largely driven by a lower effective tax rate.
- ●Operating cash flow generation improved significantly, primarily due to higher net income.
Cash Flow Health
Free Cash Flow7/8 positive
TTM$6.2B
Q1 '26
$1.0B-49%
Q4 '25
$2.0B-0%
FCF Margin
TTM22.0%
Q1 '2614.8%-51%
Sector: 9.1%Top 25%
OCF Margin30.9%
OCF/NI1.11x
CapEx Coverage3.5x
FCF Yield2.4%
FCF Growth (2Y)-7%
Cash Conversion Cycle
173 days
DSO: 73+DIO: 146−DPO: 47
Capital Allocation & Returns
Balanced
Total Shareholder YieldTTM
TTM2.1%
Div Yield0.6%
+Buyback (TTM)1.5%
Balancing returns with reinvestment
Dividend & Payout Metrics
Dividend Yield (TTM)0.6%
FCF Payout Ratio23.7%
Free Cash Flow (TTM)$6.2B
Stock Repurchases (TTM)$3.9B
Capital Return / FCF86.4%
Est. Dividends Paid (TTM)$1.5B
Shows how management rewards shareholders
Operational Efficiency & Returns
Return on Invested CapitalTTM
24.7%
Stable
-6.0%
P25MedianP75
75th pctl (med: 0.1%)
DuPont BreakdownROIC = Margin × Turn × (1+D/E)
NOPAT Margin
23.3%
8Q: 24.9%
Asset Turnover
0.81x
8Q: 0.83x
Leverage (1+D/E)
1.30x
D/E: 0.30x
DuPont: 24.5% ≈ 24.7% ROIC
Asset & CapEx Efficiency
Fixed Asset Turn
6.71x
8Q:7.99x
-347.8%
Invested Cap Turn
1.34x
8Q:1.36x
-6.5%
CapEx Intensity
12.0%
8Q:8.9%
CapEx/Depreciation
5.53x
Asset-based ROIC formula
QUARTERLY TRENDS
Last 8 quarters + TTM
| Metric | TTM | Q1 2026 | Q4 2025 | Q3 2025 | Q2 2025 | Q1 2025 | Q4 2025 | Q3 2024 | Q2 2024 |
|---|---|---|---|---|---|---|---|---|---|
Revenue | $28.2B | $7.0B↑3.1% | $6.8B↓6.9% | $7.3B↑2.8% | $7.1B↓0.9% | $7.2B↑1.7% | $7.0B↑3.9% | $6.8B↑2.0% | $6.6B |
Operating Income | $7.9B | $1.8B↑7.0% | $1.7B↓23.3% | $2.2B↑3.0% | $2.2B↓0.3% | $2.2B↑6.3% | $2.0B↑5.4% | $1.9B | $0 |
Net Income | $7.8B | $2.0B↑6.8% | $1.9B↑6.6% | $1.8B↓16.8% | $2.1B↑80.3% | $1.2B↓31.5% | $1.7B↑1.5% | $1.7B↓1.0% | $1.7B |
Operating Cash Flow | $8.7B | $1.7B↓40.4% | $2.8B↑7.4% | $2.6B↑67.7% | $1.6B↑69.8% | $925.0M↓64.1% | $2.6B↑8.0% | $2.4B↑71.3% | $1.4B |
Free Cash Flow | $6.2B | $1.0B↓49.1% | $2.0B↓0.3% | $2.0B↑93.2% | $1.1B↑95.0% | $544.0M↓74.9% | $2.2B↑3.8% | $2.1B | $0 |
Total Equity | N/A |
Valuation Analysis
Fair Value
Price-to-EarningsTTM
32.9x
Volatile
8Q: 96.7x+767%
Multiple expansion without fundamental improvement
Valuation Lenses
Earnings
32.9x
vs – sector
Cash Flow
41.4x
EV/FCF vs –
Growth-Adj
1.2xPEG
Fair for growth
Quality-Adj
1.3P/E per %ROIC
ROIC: 24.7%
Shareholder Returns
Dividend
0.6%
Buyback
1.5%
Total Yield
2.1%
Market Cap$257.50B
EV$256.56B
Multi-angle valuation analysis with sector context
Business Quality & Moat
Overall Quality Score
94/100
Exceptional
Composite score: Returns (40%) + Consistency (30%) + Earnings Quality (30%)
Returns on Capital
Return on Equity (ROE)Top 10%
39.7%
8Q:–
Return on Invested Capital (ROIC)Top 25%
24.7%
8Q:–
-6.0%
vs Sector:0.1%
DuPont Analysis (ROIC = NOPAT Margin × Asset Turnover)
NOPAT Margin: 23.3%
Asset Turnover: 0.81x
Earnings Quality
Cash Conversion
1.11x
OCF / Net Income ✓
FCF Consistency
–
Positive quarters
Competitive Moat Indicators
Pricing Power
Gross Margin48.7%
Capital Efficiency
Invested Capital Turnover1.34x
Working Capital
Cash Conversion Cycle173 days
Growth Quality & Momentum
Low Quality
Growth Quality Score
49/100
Growth 40%
Margins 30%
FCF 20%
Consistency 10%
Growth Rates
Revenue Growth YoY
2.1%
OpInc Growth YoY
-15.8%
EPS Growth YoY
27.6%
FCF 3Y CAGR
-6.6%
Margin Quality & Sustainability
Moderate
Profitability Cascade
Gross
48.7%
Operating
28.2%
Top 25% in sector
Net
27.8%
Margins Unknown
Earnings Quality Signals
SBC / Revenue
—
FCF vs Net Gap
-5.8 pts
FCF: 22.0% | Net: 27.8%
Quality = stability + cash conversion + low dilution
Balance Sheet & Solvency
Fortress
Net Debt / EBITDA
Net Cash
(0.0x)Net Cash: $2.03B
Interest Coverage
–
+Net cash position: $2.03B
Balance sheet risk & solvency analysis