Santa Clara, California-based Applied Materials, Inc. (AMAT) provides manufacturing equipment, services and software to the semiconductor, display and related industries. With a market cap of $146.8 billion, Applied Materials operates through Semiconductor Systems, Applied Global Services, and Display and Adjacent Markets segments.

Applied Materials has significantly underperformed the broader market over the past year. AMAT stock has gained 8.4% over the past 52 weeks, lagging behind the S&P 500 Index’s ($SPX) 22.8% surge over the same time frame. However, AMAT stock has soared 12.4% on a YTD basis outpacing SPX’s 3.4% gains in 2025.

Zooming in further, while AMAT has underperformed the Invesco Semiconductors ETF’s (PSI) 22.1% gains over the past year, it has outperformed PSI’s 4.9% returns on a YTD basis.

Despite delivering better-than-expected results, Applied Materials’ stock prices tanked 9.2% in the trading session after the release of its Q3 earnings on Nov. 14. Driven by the surge in Applied Global Services revenues and a notable increase in Semiconductor Systems sales, its net revenues for the quarter increased 4.8% year-over-year to more than $7 billion, exceeding the Street’s expectations by 1.5%. While its adjusted earnings increased 9.4% year-over-year to $2.32 per share, surpassing the analysts’ consensus estimates by 6.4%.

However, its Q1 revenues’ midpoint guidance of $7.15 billion fell notably below the Street’s expectations which unsettled investor confidence, leading to the massive sell-off.

For the current fiscal 2025, ending in October, AMAT is expected to report an 8.4% year-over-year growth in earnings to $9.38 per share. Moreover, the company has a robust earnings surprise history. It has surpassed the Street’s bottom-line estimates in each of the past four quarters.

Among the 33 analysts covering the AMAT stock, the consensus rating is a “Moderate Buy.” That’s based on 20 “Strong Buy,” two “Moderate Buy,” 10 “Hold,” and one “Strong Sell” rating.

This configuration is slightly more bullish than a month ago when 19 analysts gave “Strong Buy” recommendations.

On Jan. 27, KeyBanc analyst Steve Barger upgraded AMAT to “Buy” while setting a price target of $225.

AMAT’s mean price target of $211.41 represents a 15.7% premium to current price levels, while its Street-high target of $250 indicates a staggering 36.8% upside potential.