Has Buying Applied Materials Stock’s Dips Paid Off?
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Applied Materials (AMAT) stock has fallen 17.6% since its close on October 5, 2026. That is short of the 20% falls studied below, so the history is a rough guide rather than a close match. Investors are betting the semiconductor equipment maker will repeat its history of share price rebounds and that its sales recovery will continue. So how did buyers of its earlier sharp falls fare a year later?
Applied Materials Shares Usually Came Back After Another Slide
Since 2010, Applied Materials stock has dropped by more than a fifth within 30 trading days on 11 occasions. The latest instance in July 2026 is too recent to evaluate. The shares finished higher a year later in seven of the remaining ten cases, delivering a median gain of 46.5%.
Investors hoping to collect that gain typically had to sit through a further decline first. During the year following each initial drop, the deepest subsequent decline reached a median 20.5%. The highest price of the year arrived a median 328 days after the fall, or close to 11 months. The instances that failed to produce a gain cost more. After the drop on March 1, 2022, the shares fell as much as 42.3% within the following year and closed the period 8.0% lower.
So far, they are. The Semiconductor Systems segment generated most of the company’s revenue in fiscal 2025, with Applied Global Services ranking second. Total sales fell from a year earlier by 3.5% in fiscal Q4 2025 and by 2.1% in fiscal Q1 2026. Growth then returned, reaching 11.4% in fiscal Q2 2026 and 24.8% in fiscal Q3 2026, the quarter to July.
Profit has outpaced sales growth. The operating margin reached 33.7% in fiscal Q3 2026, an increase from 30.6% in fiscal Q3 2025.
Management forecasts revenue of $9.75 billion to $10.8 billion for fiscal Q4 2026. This compares with the $9.12 billion reported for fiscal Q3. The company is expected to release its fiscal Q4 report on or around November 12, 2026.
What Are Applied Materials Buyers Paying Today?
Buyers today pay far more for each dollar of profit than they did in mid-2022. At the October 14 close, the shares traded at 38.3 times the past year’s earnings, compared with 22.7 for the S&P 500. By the end of July 2022, following three of the earlier falls, the multiple was 10.7.
While today’s multiple is paid on profit, cash has not kept pace. Net income for the twelve months to July 2026 rose to $9.27 billion, up from $6.83 billion a year earlier. Over the same period, free cash flow slipped to $5.62 billion from $5.82 billion.
A year after past steep declines, most buyers of Applied Materials stock came out ahead, though they generally had to wait through a further drop first. The current sales recovery remains intact, while cash trails profit. Revenue measured against management’s forecast and free cash flow are the key figures Is the faster sales growth at Applied Materials enough reason to expect its earlier pattern to hold, at an earnings multiple well above the market’s?
Your Advisor Retired? Get A Second Opinion Before You Settle
A fall like this makes Applied Materials holders want to act, by buying more or by getting out. When the advisor who built your plan moves on, it is a natural moment to ask whether the plan still fits the life you have now. Glenn Caldicott, CIO of our Boston-based partner firm Empirical Asset Management, an SEC-registered investment adviser, offers a free review of your holdings, fees and income plan.
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