Applied Materials, Inc. engages in the provision of manufacturing equipment, services, and software to the semiconductor, display, and related industries. The company operates through three segments: Semiconductor Systems, Applied Global Services, and Display and Adjacent Markets. The Semiconductor Systems segment develops, manufactures, and sells various manufacturing equipment that is used to fabricate semiconductor chips or integrated circuits. This segment also offers various technologies, including epitaxy, ion implantation, oxidation/nitridation, rapid thermal processing, physical vapor deposition, chemical vapor deposition, chemical mechanical planarization, electrochemical deposition, atomic layer deposition, etching, and selective deposition and removal, as well as metrology and inspection tools. The Applied Global Services segment provides integrated solutions to optimize equipment and fab performance and productivity comprising spares, upgrades, services, remanufactured earlier generation equipment, and factory automation software for semiconductor, display, and other products. The Display and Adjacent Markets segment offers products for manufacturing liquid crystal displays; organic light-emitting diodes; and other display technologies for TVs, monitors, laptops, personal computers, electronic tablets, smart phones, and other consumer-oriented devices. It operates in the United States, China, Korea, Taiwan, Japan, Southeast Asia, and Europe. The company was incorporated in 1967 and is headquartered in Santa Clara, California.

Applied Materials appears to be a high-quality but already expensive business: operating profitability and returns on capital are very strong, but the market has long since priced this in. A P/E ratio of 38.2 is only slightly above the industry median, but P/S of 11.5, P/B of 14.7, and P/FCF of 63.3 are noticeably above industry benchmarks, indicating a high valuation relative to revenue, the balance sheet, and free cash flow. At the same time, the trend in the multiples does not provide a convincing signal for further valuation expansion: P/S and P/FCF remain elevated, while P/B and P/E have fluctuated without forming a sustained pattern of becoming cheaper. The company’s strength lies in its very high efficiency: ROE of 40.4%, ROA of 23.5%, and ROI of 32.2% are significantly above the median, and a net profit margin of around 30% confirms the excellent quality of the business. The operating margin of around 29.6% also remains high, although over the years it has more stabilized than accelerated, meaning there is limited additional momentum for re-rating. The gross margin of around 49.4% is close to the industry median, suggesting a good but not unique level of pricing power at the cost-of-goods-sold level. The balance sheet looks solid: debt/equity of 0.20 is below the industry median, current ratio of 2.51 and quick ratio of 1.79 are comfortable, and the cash position is strong. Growth in cash on hand, equity, assets, and earnings in recent periods supports the fundamental story and reduces the risk of financial stress. Revenue and EBITDA are also at high levels and broadly growing, confirming the scale and operational resilience of the business. Dividend yield is virtually absent and has fallen to zero, so the dividend factor does not support the investment case. Overall, the fundamentals more than justify a premium to the industry, but the current premium already looks generous, so a moderate conservative downward adjustment is appropriate for the target price.

Applied Materials, Inc.

Сильный индекс, значительно упал. Быки в растерянности.

Strong index, significantly down. The bulls are confused.

Сильный индекс, без изменений. Медведи в растерянности.

Strong index, flat. The bears are confused.

Средний индекс, значительно упал. Рынок на стороне быков.

Medium index, significantly down. The market is on the bulls' side.

Сильный индекс, без изменений. Рынок не поддерживает медведей.

Strong index, flat. The market does not support the bears.

Слабый индекс, незначительно упал

Strong profitability and AMAT’s balance sheet support the valuation, but very high P/S, P/B, and P/FCF ratios limit the potential for further price appreciation.

Key Points
Applied Materials is a leading provider of the equipment and software essential for manufacturing advanced semiconductors.
Micron Technology is a major producer of memory and storage solutions seeing significant growth from data center demand.
Which semiconductor stock deserves a spot in your portfolio?
Choosing between an equipment powerhouse and a memory giant requires understanding how the next phase of chip demand will unfold. Should you favor Applied Materials Inc(NASDAQ:AMAT) or Micron Technology Inc (NASDAQ:MU)?
Applied Materials provides the tools needed to build advanced chips, while Micron focuses on the memory and storage components those chips require. Both companies are central to the digital economy. Comparing them helps you determine whether to invest in the infrastructure behind the chips or the hardware that powers data processing.
The case for Applied Materials
Applied Materials provides materials engineering solutions, including equipment for chip fabrication. It is a major player among tech stocks serving the semiconductor and display markets worldwide. Two customers accounted for nearly 19% and 15% of net revenue in fiscal year 2025, and customer concentration like this adds a layer of risk to the business.
In FY 2025, revenue reached about $28.4 billion, representing growth of approximately 4%. The company reported net income of close to $7 billion, yielding a net margin of roughly 25%. This net margin, which measures the percentage of revenue remaining after all expenses are paid, decreased slightly from the previous year.
As of its October 2025 balance sheet, the debt-to-equity ratio was approximately 0.3x. This ratio, which compares total debt to shareholder equity, suggests a conservative use of borrowed money. The company maintained what is called its current ratio of roughly 2.6x, indicating it has more than enough short-term assets to cover its immediate liabilities. Free cash flow, or the cash remaining after paying for capital investments, was close to $5.7 billion in fiscal year 2025.
The case for Micron Technology
Micron Technology develops memory and storage products for data centers, mobile devices, and automotive applications. The company is currently expanding its capacity through a strategic partnership to acquire the P5 facility from Powerchip Semiconductor Manufacturing Corporation. Revenue is heavily concentrated, with about half of sales coming from its top ten customers and approximately 50% tied specifically to the data center market.
In FY 2025, revenue reached about $37.4 billion, which is a significant increase of close to 59% from the prior year. Net income for the period was approximately $8.5 billion, resulting in a net margin of roughly 23%. This performance reflects a substantial recovery from a net loss reported just two years prior.
As of its August 2025 balance sheet, the debt-to-equity ratio was roughly 0.3x. The current ratio, measuring the ability to pay short-term obligations with current assets, was close to 2.5x. Free cash flow, which is operating cash minus capital spending, reached approximately $1.7 billion for the fiscal year ended in 2025.
Risk profile comparison
Applied Materials faces significant risks from geopolitical tensions and trade regulations, particularly U.S. export controls on sales to China. These rules have caused revenue volatility and led to a settlement of nearly $252 million for violations in 2026. The company also deals with the cyclical nature of the industry, which can make it difficult to predict future demand for high-end equipment.
Micron Technology deals with intense competition from rivals such as Samsung Electronics (OTC:SSNLF) and SK Hynix (NASDAQ:SKHY). The company also faces legal challenges, including class action litigation involving allegations of price inflation in the memory market. Its heavy reliance on the data center segment means any slowdown in that specific market could significantly hurt its financial results.
Valuation comparison
Micron Technology currently offers a much lower Forward P/E than Applied Materials, though the P/S ratio comparison is relatively similar.
Metric
Applied Materials
Micron Technology
Forward P/E
26.3x
6.3x
P/S ratio
14.5x
12.3x
Valuation metrics sourced from Financial Modeling Prep (FMP) and may differ from other data providers.
Which stock would I buy in 2026?
Applied Materials is the largest supplier in the world of wafer fabrication equipment for semiconductors. Its wide slate of offerings in chip manufacturing gives it inroads with customers by selling integrated solutions across technologies, making it harder for competitors to dislodge it. The business posted a larger-than-expected rise in sales and income in its third quarter of fiscal 2026, reported last month. The business posted a 25% increase in revenue to $9.1 billion with a 43% jump in net income. Wall Street expects full-year sales to rise 21% to $34.3 billion, with a very healthy 50% gain in net income.
Micron, meanwhile, is enjoying a stunning surge in demand for its products, thanks to (of course) AI. Management recently guided that the fourth quarter fiscal 2026 revenue will be around $50 billion -- that is more than all of 2025 by billions of dollars. According to analysts at Argus, no company besides Nvidia Corp (NASDAQ:NVDA) has consistently blown away sales and earnings estimates in the AI era as consistently as Micron. Consider that for the next fiscal year, 2027, Wall Street analyst consensus projects revenue of $244 billion -- that is a stunning 6.5 times 2025's sales.
There are risks to Micron: it has benefited from a worldwide memory supply crunch that has boosted selling prices, which means that when the crunch is alleviated, prices will likely fall. It also relies on AI remaining a massive spending machine. But the growth is too much to ignore, without any disrespect to Applied Materials' excellent business. At a forward P/E of a little more than 6, Micron isn't exactly in value stock territory, but it appears to be a screaming bargain if projections come to fruition.
Should you buy stock in Applied Materials right now?
Before you buy stock in Applied Materials, consider this:
The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and Applied Materials wasn’t one of them. The 10 stocks that made the cut could produce monster returns in the coming years.
Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you’d have $409,917!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you’d have $1,341,724!*
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*Stock Advisor returns as of September 11, 2026.
Brendan Coffey has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Applied Materials, Micron Technology, and Nvidia. The Motley Fool has a disclosure policy.

Applied Materials vs. Micron Technology: Which Technology Stock Is a Better Buy in 2026?

Key Points
Astera Labs provides essential connectivity hardware for the rapidly expanding AI data-center market.
Applied Materials is a foundational leader in the semiconductor equipment industry with multi-billion dollar cash flows.
Which semiconductor stock deserves a spot in your portfolio?
High-performance computing is currently undergoing a massive generational shift. Deciding between Astera Labs Inc (NASDAQ:ALAB) and Applied Materials Inc (NASDAQ:AMAT) means choosing between a fast-growing connectivity specialist and an established titan of manufacturing equipment.
Astera Labs focuses on the internal plumbing of data centers, providing chips that move data between processors. Applied Materials builds the actual machines that make those chips possible. While both benefit from artificial intelligence, they occupy very different rungs on the technology ladder.
The case for Astera Labs
Astera Labs sells high-speed connectivity hardware and software designed for AI-heavy data centers. Its primary products include PCIe and Ethernet solutions that help hyperscale cloud providers manage massive data workloads. In its latest annual report, filed for the period ending December 31, 2025, the company noted that one end customer represented more than 70% of its revenue. Customer concentration like this adds a layer of risk to the business.
In FY 2025, revenue reached nearly $853 million, which is an increase of approximately 115% over the prior year. This growth resulted in a net income of roughly $219 million, compared to a net loss in the previous fiscal year. The company recorded a net margin of close to 26% during this period. Such expansion is notable among semiconductor stocks catering to the cloud market.
The company carries no debt, resulting in a debt-to-equity ratio of 0.0x. This metric compares total debt to shareholder equity to show how a firm finances its assets. As of its December 2025 balance sheet, the so-called current ratio was nearly 10.2x, indicating a strong ability to cover short-term debts. Free cash flow was roughly $282 million. Note that stock-based compensation represented just about 50% of operating cash flow, which inflates reported cash generation since SBC is a non-cash expense added back in the cash flow statement.
The case for Applied Materials
Applied Materials provides the specialized equipment and materials-engineering solutions used to manufacture semiconductors and advanced displays. Its tools are essential for logic and memory chip production, serving a broad global customer base. In its latest annual report, filed for the fiscal year ended Oct. 26, 2025, two major customers accounted for approximately 19% and 15% of net revenue, respectively. This customer concentration means the company is sensitive to the spending plans of a few large manufacturers.
In FY 2025, revenue reached nearly $28.4 billion, reflecting a growth rate of more than 4% year over year. The company generated a net income of approximately $7 billion, maintaining a steady performance in a mature market. Its net margin was close to 25% for the year. While the growth rate is slower than that of smaller peers, the sheer scale of the revenue base provides significant stability.
As of its October 2025 balance sheet, the debt-to-equity ratio was roughly 0.3x. This ratio shows that for every dollar of equity, the company has about 30 cents in debt. Its current ratio stands at approximately 2.6x, indicating the firm has more than twice the short-term assets needed to cover its liabilities. Free cash flow for the fiscal year was nearly $5.7 billion. This cash flow, which is cash from operations minus capital spending, allows for consistent investment in research and development.
Risk profile comparison
Astera Labs faces substantial risks due to its heavy reliance on a small number of hyperscale customers like Amazon.com Inc (NASDAQ:AMZN). The loss of a single major partner or a reduction in AI infrastructure spending could severely impact its financial results. Furthermore, the company relies on third-party partners for integrated circuit fabrication, creating a bottleneck if manufacturing capacity is constrained. Geopolitical tensions in East Asia also threaten its supply chain and product distribution.
Applied Materials is navigating significant regulatory risks, including a $252 million settlement in early 2026 related to unauthorized shipments. The company is also vulnerable to international trade restrictions and tariffs, particularly those involving sales to China. It faces stiff competition from major players like Broadcom Inc (NASDAQ:AVGO) and Marvell Technology Inc (NASDAQ:MRVL) in the broader chip ecosystem. Finally, the inherent cyclicality of the semiconductor equipment industry can lead to volatile earnings when manufacturers reduce their capital budgets.
Valuation comparison
Applied Materials currently offers a lower Forward P/E based on future earnings estimates, whereas Astera Labs commands a much higher P/S ratio.
Metric
Astera Labs
Applied Materials
Forward P/E
43.9x
26.3x
P/S ratio
43.0x
12.2x
Valuation metrics sourced from Financial Modeling Prep (FMP) and may differ from other data providers.
Which stock would I buy in 2026?
Astera Labs sees its business providing connectivity for AI data centers -- meaning chips that let CPUs, GPUs, memory, and storage inside an AI rack communicate -- surging due to hyperscaler demand. Hyperscalers, those very large AI businesses, are expected to spend more than $1 trillion on tech in 2027. Astera Labs delivered excellent results in the second quarter of 2026, as reported last month, with record revenue of $392.4 million, up 104% year-over-year. The performance was driven by broad-based strength across its entire product portfolio, reflecting the diversification of its business as it continues to win new designs across multiple customers and product categories. Wall Street sees sales more than doubling in 2026 to $1.9 billion, with net income of $588 million, also well more than double 2025 levels.
Applied Materials, meanwhile, is the largest supplier in the world of wafer fabrication equipment for semiconductors. Its wide slate of offerings in chip manufacturing gives it inroads with customers by selling integrated solutions across technologies, making it harder for competitors to dislodge it. The business posted a larger-than-expected rise in sales and income in its third quarter of fiscal 2026, reported last month. The business posted a 25% increase in revenue to $9.1 billion with a 43% jump in net income. Wall Street expects full-year sales to rise 21% to $34.3 billion, with a very healthy 50% gain in net income.
Astera's growth is impressive, but the stock is fully priced as a growth stock with its current P/S and forward P/E ratios. Applied Materials normally won't be as fast-growing as it is in 2026, but the business should continue to reap the benefits of the AI boom as well as its broader market position in tech. At a more attractive set of ratios than Astera, Applied Materials is the choice here for long-term investors.
Should you buy stock in Astera Labs right now?
Before you buy stock in Astera Labs, consider this:
The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and Astera Labs wasn’t one of them. The 10 stocks that made the cut could produce monster returns in the coming years.
Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you’d have $409,917!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you’d have $1,341,724!*
Now, it’s worth noting Stock Advisor’s total average return is 942% — a market-crushing outperformance compared to 211% for the S&P 500. Don't miss the latest top 10 list, available with Stock Advisor, and join an investing community built by individual investors for individual investors.
*Stock Advisor returns as of September 11, 2026.
Brendan Coffey has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Amazon, Applied Materials, Broadcom, and Marvell Technology. The Motley Fool recommends Astera Labs. The Motley Fool has a disclosure policy.

Astera Labs vs. Applied Materials: Which Technology Stock Is a Better Buy in 2026?

The board of directors of AbbVie declared a quarterly cash dividend of $1.73 per share. The cash dividend is payable November 16, 2026, to stockholders of record at the close of business on October 15, 2026. Since the company's inception in 2013, AbbVie has increased its dividend by more than 330 percent. AbbVie is a member of the S&P Dividend Aristocrats Index, which tracks companies that have annually increased their dividend for at least 25 consecutive years.
The Meta Platforms, board of directors today declared a quarterly cash dividend of $0.525 per share of the company's outstanding Class A common stock and Class B common stock, payable on September 28, 2026 to stockholders of record as of the close of business on September 21, 2026.
W. R. Berkley announced today that its Board of Directors has declared a regular quarterly cash dividend on its common stock of 10 cents per share to be paid on September 30, 2026 to stockholders of record at the close of business on September 21, 2026.
Granite announced that its Board of Directors has declared a quarterly cash dividend of $0.13 per common share. The dividend is payable on October 15, 2026, to all shareholders of record at the close of business on September 30, 2026.
Applied Materials announced that its Board of Directors has approved a quarterly cash dividend of $0.53 per share payable on the company's common stock. The dividend is payable on Dec. 10, 2026 to shareholders of record as of Nov. 19, 2026. The cash dividend is a key component of Applied's capital allocation strategy. In March 2026, Applied announced a 15-percent increase in the quarterly dividend per share, from $0.46 to $0.53, marking nine consecutive years of dividend increases. With that increase, Applied has grown its dividend per share at a compound annual growth rate of 18 percent over the past decade.

Daily Dividend Report: ABBV,META,WRB,GVA,AMAT

Broadridge Financial Solutions, Inc. BR stock has gained 16.1% over the past three months compared with the industry’s 17.4% growth and the Zacks S&P 500 Composite's 1.9% return.
Three-Month Share Price Performance
Let us delve deeper into the factors that have contributed to the company’s strong performance.
High Recurring Revenue Visibility & Durable Growth
Broadridge’s recurring revenue model provides high visibility, supported by 98% client retention and a $470 million backlog, representing about 10% of fiscal 2026 recurring revenues. Fiscal 2026 recurring revenues rose 8% on a constant-currency basis to $4.88 billion, including 6% organic growth. The sales pipeline increased more than one-third year over year, while record fourth-quarter closed sales of $158 million and continued position growth support management’s fiscal 2027 guidance for 6-8% recurring revenue growth and 8-12% adjusted EPS growth. The combination of high retention, backlog conversion and a larger pipeline should support steady organic growth over the next several years. This visibility reduces reliance on near-term market conditions and reinforces the durability of Broadridge’s earnings profile.
Margin & Earnings Rise Drive Growth Outlook
BR’s operating income increased 10% to $546.2 million in the fourth quarter of fiscal 2026, while operating margin expanded 50 basis points to 24.6%. Adjusted operating income rose 7% to $598 million, while net earnings increased 6% to $398 million and adjusted net earnings rose 5% to $442 million.
Management expects $25 million of artificial intelligence-driven productivity savings in fiscal 2027, which should help fund ongoing investments and support adjusted operating margin expansion to about 21% from 20.5% in fiscal 2026. This points to continued operating leverage and earnings growth as productivity initiatives scale.
Strong Cash Flow Supports Greater Capital Returns
Broadridge generated $1.35 billion in operating cash flow and $1.23 billion in free cash flow in fiscal 2026, representing 110% conversion of adjusted net earnings. The company returned more than $1 billion to shareholders through dividends and net share repurchases. Strong cash generation supports continued investment and acquisitions while funding shareholder returns, including a 12% dividend increase and ongoing buybacks.
BR’s Zacks Rank & Stocks to Consider
Broadridge currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
A couple of better-ranked stocks in the broader Computer and Technology sector are Analog Devices, Inc. ADI and Applied Materials, Inc. AMAT.
Analog Devices carries a Zacks Rank #2 (Buy) at present. It has a long-term earnings growth expectation of 25%.
ADI delivered a trailing four-quarter earnings surprise of 4.8%, on average.
Applied Materials also holds a Zacks Rank of 2 at present. It has a long-term earnings growth expectation of 28.1%.
AMAT beat earnings estimates in each of the trailing four quarters, with an average earnings surprise of 5.5%.
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This article originally published on Zacks Investment Research (zacks.com).

BR Stock Rises 16.1% in 3 Months: Here's What You Should Know

Key Points
Applied Materials holds a dominant position in providing the essential equipment used to manufacture the world's most advanced chips.
Intel is aggressively transforming its business to become a major global foundry player through massive infrastructure investment.
Which semiconductor stock deserves a spot in your portfolio?
One company builds the tools, while the other builds the chips and the factories. Choosing between Applied Materials (NASDAQ:AMAT) and Intel (NASDAQ:INTC) means deciding where you see the most value.
Applied Materials provides the essential equipment used to manufacture semiconductors, making it a critical supplier to the entire industry. Intel is a traditional chipmaker shifting its focus toward becoming a global foundry. Comparing these two reveals different ways to play the growth of the technology sector.
The case for Applied Materials
In its latest annual report, Applied Materials describes itself as a leader in materials engineering solutions used to create nearly all new chips and advanced displays globally. Its business model relies on the ongoing expansion of global chip manufacturing capacity among semiconductor stocks. Customer concentration like this adds a layer of risk to the business, as two customers accounted for approximately 19% and 15% of net revenue in fiscal 2025.
In FY 2025, revenue reached nearly $28.4 billion, up roughly 4.4% compared to the prior year. The company reported net income of approximately $7 billion. While revenue grew, the net margin slightly decreased to about 24.7% from 26.4% in the previous fiscal year, reflecting slight shifts in the business mix.
As of its October 2025 balance sheet, the debt-to-equity ratio was nearly 0.3, which compares total debt to shareholder equity. The current ratio, which measures the ability to pay short-term obligations using liquid assets, was roughly 2.6. Free cash flow, calculated as cash from operations minus capital expenditures, was approximately $5.7 billion. This cash generation allows the company to invest in research while maintaining a strong financial position.
The case for Intel
Intel designs and manufactures its own chips while aggressively expanding its foundry services to build chips for other companies. In its latest annual report, the company detailed a major strategic shift to construct massive fabrication plants. This transition is capital-intensive and currently relies on a limited number of confirmed partners, with Tesla (NASDAQ:TSLA) being the only publicly confirmed 14A customer for these foundry services.
In fiscal 2025, revenue reached roughly $52.9 billion, essentially flat compared to the prior year. The company reported a net loss of approximately $267 million for the period. While still in the red, this result showed a significant improvement over the heavy net loss Intel posted in fiscal 2024, though net margin remained slightly negative at nearly -0.5%.
As of its December 2025 balance sheet, the debt-to-equity ratio was roughly 0.4. The current ratio was approximately 2, indicating the company holds twice as many current assets as current liabilities. Free cash flow was negative at nearly $4.9 billion, calculated as cash flow from operations minus capital expenditures. Note that stock-based compensation represented roughly 25.1% of operating cash flow, which inflates reported cash generation since SBC is a non-cash expense added back in the cash flow statement.
Risk profile comparison
Applied Materials faces significant regulatory risks, particularly regarding U.S. export controls on technology sales to China. These restrictions led to a $252 million settlement in February 2026 for export violations involving Semiconductor Manufacturing International. The company also operates in a cyclical industry where demand for manufacturing equipment can fluctuate based on global economic health.
Intel carries significant financial risks following a $15 billion equity raise, which can dilute the value of shares held by existing investors. The company is also dealing with shareholder litigation regarding a 10% equity stake deal granted to the U.S. government. Operationally, it must manage heavy capital expenditure requirements while competing against Advanced Micro Devices (NASDAQ:AMD).
Valuation comparison
Intel appears cheaper based on sales, but Applied Materials carries a lower multiple relative to its future earnings estimates.
Metric
Applied Materials
Intel
Forward P/E
33.4
59.2
P/S ratio
12
8.5
Which stock would I buy in 2026?
Intel is in the middle of a significant business transformation, moving from solely designing its own chips to expanding its foundries to make chips for other companies. This push into contract manufacturing is expensive (those fabs aren't going to build themselves). You can see some evidence of that in the company's balance sheet: While Intel only lost around $267 million in fiscal 2025, it had a net loss of $18.8 billion the prior year. That might make some conservative investors nervous.
Meanwhile, Applied Materials is not currently pursuing any such capital-intensive strategy, and it hasn't reported a loss in at least 10 years. It pays a (very) modest dividend, while Intel suspended its dividend in 2024. And though investors know past performance is no indication of future results, Applied Materials stock has outperformed Intel shares by more than 1,200 percentage points over the past 10 years. Intel's returns haven't even kept pace with the S&P 500 over that time frame.
It would be silly to suggest a half-trillion-dollar company is going to go belly-up overnight, and I don't think that's what will happen to Intel. But the business is in a key transitional moment, and that always brings uncertainty. For that reason, I think Applied Materials is the more attractive buy here.
Should you buy stock in Applied Materials right now?
Before you buy stock in Applied Materials, consider this:
The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and Applied Materials wasn’t one of them. The 10 stocks that made the cut could produce monster returns in the coming years.
Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you’d have $410,024!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you’d have $1,372,815!*
Now, it’s worth noting Stock Advisor’s total average return is 950% — a market-crushing outperformance compared to 211% for the S&P 500. Don't miss the latest top 10 list, available with Stock Advisor, and join an investing community built by individual investors for individual investors.
*Stock Advisor returns as of September 11, 2026.
Erin Kennedy has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Advanced Micro Devices, Applied Materials, Intel, and Tesla. The Motley Fool has a disclosure policy.

Applied Materials vs. Intel: Which Tech Stock Is a Better Buy in 2026?

Key Points
Demand for AI and memory chips has increased the demand for semiconductor equipment.
As chips get more advanced, equipment turnover increases, which leads to higher sales for equipment makers.
These three stocks are positioned at the center of this opportunity and have outperformed some of the biggest chipmakers this year.
AI chips and memory chips have been two of the hottest AI sectors, but focusing exclusively on chips may cause investors to miss out on another big opportunity in the artificial intelligence (AI) industry.
While tech giants continue to line up and pay higher prices for these chips, chipmakers need specialized semiconductor equipment to meet demand. Without this equipment, it is impossible to create the same chips that are in such high demand.
Missed Nvidia in 2009? This Rare Signal Is Flashing Again. In 2009, a "Double Down" signal flashed for a little-known chipmaker called Nvidia. For the first time in years, that same "Total Conviction" signal is flashing for a company 1/100th the size of Nvidia. Continue »
Some semiconductor equipment companies have been outperforming chipmakers this year thanks to rising demand and limited focus on individual stocks. These are some of the top semiconductor equipment makers that are the bedrock for the entire chip industry.
Applied Materials
Applied Materials (NASDAQ: AMAT) is a leading semiconductor equipment maker that reported "unprecedented demand" for its materials engineering solutions. It has R&D partnerships with leading chipmakers and universities to help the company create equipment for the next generation of chips. As these investments take shape, the company continues to deliver meaningful revenue growth.
Sales surged by 25% year over year in its fiscal 2026 third quarter ended July 26, as the company expanded its gross margins for the 13th consecutive quarter. That type of pricing power should continue as AI tailwinds accelerate.
Samsung (OTC: SSNLF) is a long-term customer that is part of Applied Materials' R&D efforts. The former locked in 70% of its memory chip supply with tech leaders through 2031. Samsung will need Applied Materials' equipment to create all of those chips, which makes revenue visible for years.
It's no wonder Applied Materials Chief Executive Officer Gary Dickerson said that the company "expect[s] another strong growth year for [the company] in 2027." Applied Materials is aiming for $10.25 billion in fiscal 2026 fourth-quarter revenue, which represents more than a 12% sequential growth rate.
Lam Research
Lam Research (NASDAQ: LRCX) has surged by more than 70% this year, soundly outperforming chipmakers Nvidia (NASDAQ: NVDA) and Broadcom (NASDAQ: AVGO), which both happen to be customers. Lam Research's advanced wafer fabrication equipment is a major enabler of AI chips.
As AI chips get more advanced, turnover for Lam Research's equipment increases. A faster turnover translates into more product sales and higher revenue growth. It's the complete opposite of the auto industry, where people are holding on to their vehicles for as long as possible, limiting automobile companies' growth rates.
Lam Research has seen this phenomenon in its financial results. Revenue increased by 15% sequentially, driven by increased demand for AI chips, which necessitates more semiconductor equipment. The projected midpoint of $8.1 billion in Q3 revenue implies 21% sequential growth.
Applied Materials and Lam Research are well-established semiconductor equipment companies with market caps approaching $400 billion. Cohu (NASDAQ: COHU) is a much smaller company with a market cap of about $2.5 billion that is posting high growth rates for its chip testing equipment.
With that equipment, chipmakers and hyperscalers can ensure that the chips they sell work properly before customers receive them. Naturally, the soaring demand for AI chips has increased demand for Cohu's equipment.
The company posted 38% year-over-year revenue growth in the second quarter and raised its annual AI-driven compute opportunity pipeline to about $850 million. Q3 sales are forecast to rise to $170 million at the midpoint, marking a gain of more than 12% sequentially.
Cohu has also widened its margins meaningfully during this stretch. A $16.9 million net loss in Q2 2025 narrowed to a $0.2 million net loss in the most recent quarter. This improvement, combined with the broader semiconductor opportunity, suggests that Cohu can achieve profitability and quickly improves its margins. With its AI-driven compute opportunity, surging profits can warrant an a higher valuation.
Should you buy stock in Applied Materials right now?
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Investors Who Have Been Following AI Chips and Memory Chips May Be Forgetting About the Vital Industry That Enables Both of Them

The S&P 500 Index ($SPX) (SPY) closed down -0.58% on Thursday, the Dow Jones Industrial Average ($DOWI) (DIA) closed down -0.60%, and the Nasdaq 100 Index ($IUXX) (QQQ) closed down -1.08%. E-mini S&P futures (ESU26) fell -0.61%, and September E-mini Nasdaq futures (NQU26) fell -1.07%.
Stock indexes settled lower on Thursday, with the S&P 500 and Dow Jones Industrials dropping to 5-week lows. Soaring energy prices pushed global bond yields sharply higher on Thursday, weighing on stocks. WTI crude oil surged more than +6% on Thursday to a 3.5-month high amid fears that the US-Iran war will persist, increasing inflation risks and prompting the world’s central banks to keep raising interest rates. The 10-year UK Gilt yield jumped to a 19-year high today of 5.38%, the 10-year German Bund yield surged to a 17-year high of 3.51%, and the 10-year T-note yield rose to a 2.75-year high of 4.96%.
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Stocks added to their losses on Thursday, and T-note yields climbed further after US Aug PPI rose more than expected, signaling persistent price pressures, and after weekly jobless claims remained low, signaling labor market strength.
US weekly initial unemployment claims fell -1,000 to 206,000, close to expectations of 205,000 and signaling a stable labor market.
US Aug PPI final demand rose +5.4% y/y, stronger than expectations of +5.3% y/y. Aug PPI ex-food and energy rose +4.6% y/y, right on expectations.
US Aug existing home sales fell -2.0% m/m to a 14-month low of 3.98 million, right on expectations.
The escalating trade war between the US and Canada is also weighing on market sentiment. On Tuesday, Canada imposed tariffs of 15% to 50% on hundreds of US goods in retaliation for the US action last month to impose 50% tariffs on $20 billion of imports from Canada. The US responded by moving to block imports of some Canadian products and slapping new tariffs on others, as well as seeking to bar Canadian companies from selling to US government contractors.
Oct WTI crude oil prices (CLV26) surged more than +6% on Thursday to a 3.5-month high. Crude prices are climbing after Iran said that it is ready for a more intense war and will escalate counterstrikes if the US continues attacking its territory and infrastructure. The prospect of a lengthy conflict that limits crude supplies from the Middle East is underpinning crude oil prices. Crude oil prices added to their gains on Thursday after Saudi Arabia told OPEC that its crude production in August fell to 6.238 million bpd, the lowest since 1990.
The markets are discounting a 75% chance of a +25 bp rate hike at the next FOMC meeting on September 15-16.
Overseas stock markets settled mixed on Thursday. The Euro Stoxx 50 dropped to a 6-week low and closed down -0.67%. China's Shanghai Composite closed down -0.43%. Japan's Nikkei-225 Stock Average closed up +0.20%.
Interest Rates
December 10-year T-notes (ZNZ6) closed down by -23 ticks. The 10-year T-note yield rose +10.7 bp to 4.948%. T-notes tumbled to a 2.75-year nearest futures low on Thursday, and the 10-year T-note yield rose to a 2.75-year high of 4.963%. T-notes sold off as crude oil prices surged, which boosted inflation expectations. WTI crude oil rose more than +6% on Thursday to a 3.5-month high, lifting the 10-year breakeven inflation rate to a 3.25-month high of 2.419%.
On the positive side for T-notes was the decline in US Aug existing home sales to a 14-month low. T-notes also found support on strong demand for the Treasury’s $22 billion auction of 30-year T-bonds that had a bid-to-cover ratio of 2.61, well above the 10-auction average of 2.40.
European government bond yields moved sharply higher on Thursday. The 10-year German bund yield jumped to a 17-year high of 3.508% and finished up +5.7 bp to 3.501%. The 10-year UK gilt yield soared to a 19-year high of 5.376% and finished up +11.2 bp to 5.374%.
The ECB, as expected, raised the deposit facility rate by 25 bp to 2.50% and said inflation will stay above 2% for an "extended period."
The ECB raised its 2026 Eurozone GDP forecast to +0.9% from a prior forecast of +0.8%, and kept its 2026 inflation ex-food and energy forecast unchanged at 2.5%.
Markets are discounting a 97% chance of a +25 bp ECB rate hike at the ECB’s next meeting on October 29.
US Stock Movers
Chipmakers and AI-infrastructure stocks retreated on Thursday, pressuring the broader market. CoreWeave (CRWV), Intel (INTC), and Lam Research (LRCX) closed down more than -5%, and Micron Technology (MU) and Western Digital (WDC) closed down more than -4%. Also, ARM Holdings (ARM), SanDisk (SNDK), Advanced Micro Devices (AMD), KLA Corp (KLAC), Marvell Technology (MRVL), and Applied Materials (AMAT) closed down more than -3%, and Nvidia(NVDA), ASML Holding NV (ASML), and Seagate Technology Holdings Plc (STX) closed down more than -2%.
Copper-producing stocks are falling today, with copper prices down more than -4% after Reuters reported that the White House has not yet made a decision on refined copper tariffs as it weighs concerns of higher prices raising manufacturing costs against the potential benefits of encouraging more domestic mining. Southern Copper (SCCO) closed down more than -7%, and Freeport-McMoRan (FCX) closed down more than -6%. Also, Rio Tinto Plc (RIO) closed down more than -4%, and Newmont Corp (NEM) closed down more than -2%.
Home builders and suppliers moved lower on Thursday after the 10-year T-note yield jumped to a 2.75-year high, pushing up mortgage rates and weighing on housing demand. Lennar (LEN), KB Home (KBH), and Builders Firstsource (BLDR) closed down more than -3%. Also, DR Horton (DHI) and Pulte Group (PHM) closed down more than -2%, and Toll Brothers (TOL) and Home Depot (HD) closed down more than -1%.
Cooper Cos (COO) closed down more than -14% to lead losers in the S&P 500 after reporting Q3 net sales of $1.07 billion, below the consensus of $1.10 billion, and cutting its full-year revenue forecast to $4.23 billion to $4.25 billion from a previous forecast of $4.29 billion to $4.32 billion, weaker than the consensus of $4.31 billion.
American Eagle Outfitters (AEO) closed down more than -13% after reporting Q2 comparable sales rose +6.00%, weaker than the consensus of +6.47%.
FactSet Research Systems (FDS) closed down more than -5% after OpenAI said it’s releasing ChatGPT for Financial Services, a new tool for investment bankers and equity researchers.
AeroVironment (AVAV) closed up more than +4% after reporting Q1 revenue of $480.5 million, stronger than the consensus of $455.8 million.
Apple (AAPL) closed up more than +3% to lead gainers in the Dow Jones Industrials after analysts were generally positive about the company’s new iPhone Duo, its first foldable phone.
Earnings Reports (9/11/2026)
Kroger Co/The (KR) and Rent the Runway Inc (RENT).
On the date of publication, Rich Asplund 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.
More news from Barchart

Stocks Settle Lower as Surging Crude Prices Boost Fed Rate Hike Chances

The S&P 500 Index ($SPX) (SPY) is down -0.42% today, the Dow Jones Industrial Average ($DOWI) (DIA) is down -0.43%, and the Nasdaq 100 Index ($IUXX) (QQQ) is down -0.69%. E-mini S&P futures (ESU26) are down -0.40%, and September E-mini Nasdaq futures (NQU26) are down -0.65%.
Stock indexes are under pressure today, with the S&P 500 and Dow Jones Industrials dropping to 5-week lows. Soaring energy prices are pushing global bond yields higher today, weighing on stocks. WTI crude oil is up more than +3% today at a 3.5-month high amid fears that the US-Iran war will persist, increasing inflation risks and prompting the world’s central banks to keep raising interest rates. The 10-year UK Gilt yield rose to a 19-year high today of 5.36%, the 10-year German Bund yield climbed to a 15-year high of 3.50%, and the 10-year T-note yield rose to a 2.75-year high of 4.93%.
Join 200K+ Subscribers: Find out why the midday Barchart Brief newsletter is a must-read for thousands daily.
Stocks added to their losses today, and T-note yields climbed further after US Aug PPI rose more than expected, signaling persistent price pressures, and after weekly jobless claims remained low, signaling labor market strength.
US weekly initial unemployment claims fell -1,000 to 206,000, close to expectations of 205,000 and signaling a stable labor market.
US Aug PPI final demand rose +5.4% y/y, stronger than expectations of +5.3% y/y. Aug PPI ex-food and energy rose +4.6% y/y, right on expectations.
US Aug existing home sales fell -2.0% m/m to a 14-month low of 3.98 million, right on expectations.
The escalating trade war between the US and Canada is also weighing on market sentiment. On Tuesday, Canada imposed tariffs of 15% to 50% on hundreds of US goods in retaliation for the US action last month to impose 50% tariffs on $20 billion of imports from Canada. The US responded by moving to block imports of some Canadian products and slapping new tariffs on others, as well as seeking to bar Canadian companies from selling to US government contractors.
Oct WTI crude oil prices (CLV26) are up more than +3% today at a 3.5-month high. Crude prices are climbing after Iran said that it is ready for a more intense war and will escalate counterstrikes if the US continues attacking its territory and infrastructure. The prospect of a lengthy conflict that limits crude supplies from the Middle East is underpinning crude oil prices. Crude oil prices added to their gains today after Saudi Arabia told OPEC that its crude production in August fell to 6.238 million bpd, the lowest since 1990.
The markets are discounting a 72% chance of a +25 bp rate hike at the next FOMC meeting on September 15-16.
Overseas stock markets are mixed today. The Euro Stoxx 50 dropped to a 6-week low and is down -0.42%. China's Shanghai Composite closed down -0.43%. Japan's Nikkei-225 Stock Average closed up +0.20%.
Interest Rates
December 10-year T-notes (ZNZ6) are down by -17 ticks. The 10-year T-note yield is up +7.3 bp to 4.914%. T-notes tumbled to a 2.75-year nearest futures low, and the 10-year T-note yield rose to a 2.75-year high of 4.928%. T-notes are under pressure from higher crude oil prices, which are boosting inflation expectations. WTI crude oil is up more than +3% today at a 3.5-month high, lifting the 10-year breakeven inflation rate to a 3.25-month high of 2.408%. Supply pressures are also weighing on T-notes as the Treasury will auction $22 billion of 30-year T-bonds later today. T-notes added to their losses today after Aug PPI rose more than expected.
European government bond yields are moving higher today. The 10-year German bund yield climbed to a new 15-year high of 3.495% and is up +4.8 bp to 3.492%. The 10-year UK gilt yield rose to a 19-year high of 5.362% and is up +9.7 bp to 5.358%.
The ECB, as expected, raised the deposit facility rate by 25 bp to 2.50% and said inflation will stay above 2% for an "extended period."
The ECB raised its 2026 Eurozone GDP forecast to +0.9% from a prior forecast of +0.8%, and kept its 2026 inflation ex-food and energy forecast unchanged at 2.5%.
Markets are discounting a 77% chance of a +25 bp ECB rate hike at the ECB’s next meeting on October 29.
US Stock Movers
Chipmakers and AI-infrastructure stocks are sliding today, pressuring the broader market. CoreWeave (CRWV), Intel (INTC), and Lam Research (LRCX) are down more than -4%, and Micron Technology (MU), SanDisk (SNDK), and Western Digital (WDC) are down more than -3%. Also, ARM Holdings (ARM), Advanced Micro Devices (AMD), and Applied Materials (AMAT) are down more than -2%, and Nvidia(NVDA) is down more than 2% to lead losers in the Dow Jones Industrials.
Copper-producing stocks are falling today, with copper prices down more than -4% after Reuters reported that the White House has not yet made a decision on refined copper tariffs as it weighs concerns of higher prices raising manufacturing costs against the potential benefits of encouraging more domestic mining. Freeport-McMoRan (FCX) is down more than -7%, and Southern Copper (SCCO) is down more than -6%. Also, Rio Tinto Plc (RIO) is down more than -4%, and Newmont Corp (NEM) is down more than -2%.
Home builders and suppliers are retreating today after the 10-year T-note yield jumped to a 2.75-year high, pushing up mortgage rates and weighing on housing demand. Lennar (LEN) is down more than -4%, and DR Horton (DHI), Pulte Group (PHM), KB Home (KBH), and Builders Firstsource (BLDR) are down more than -3%. Also, Toll Brothers (TOL) is down more than -2%.
AeroVironment (AVAV) is up more than +10% to lead drone makers higher after reporting Q1 revenue of $480.5 million, stronger than the consensus of $455.8 million. Also, Red Cat Holdings (RCAT) is up more than +3%, and Defiance Drone and Modern Warfare ETF (JEDI), Aevex Corp (AVEX), Unusual Machines (UMAC), and Kratos Defense & Security Solutions (KTOS) are up more than +2%.
Cybersecurity stocks are climbing today, a supportive factor for stocks. Fortinet (FTNT) and Okta (OKTA) are up more than +2%, and CrowdStrike Holdings (CRWD), Palo Alto Networks (PANW), and SentinelOne (S) are up more than +1%.
American Eagle Outfitters (AEO) is down more than -14% after reporting Q2 comparable sales rose +6.00%, weaker than the consensus of +6.47%.
Cooper Cos (COO) is down more than -13% to lead losers in the S&P 500 after reporting Q3 net sales of $1.07 billion, below the consensus of $1.10 billion, and cutting its full-year revenue forecast to $4.23 billion to $4.25 billion from a previous forecast of $4.29 billion to $4.32 billion, weaker than the consensus of $4.31 billion.
Driven Brands Holdings (DRVN) is down more than -3% after Bank of America Global Research double-downgraded the stock to underperform from buy with a price target of $12.
Kymera Therapeutics (KYMR) is up more than +1% after Wolfe Research upgraded the stock to outperform from peer perform with a price target of $180.
Earnings Reports (9/10/2026)
Adobe Inc (ADBE), Copart Inc (CPRT), Macy's Inc (M), Oracle Corp (ORCL).
On the date of publication, Rich Asplund 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.

Stocks Retreat as 10-year T-note Yield Reaches New 2.75-year High

ASML Holding N.V. ASML is advancing next-generation semiconductor manufacturing through a collaboration with Taiwan Semiconductor Manufacturing Company Limited TSM to support the future development of High Numerical Aperture Extreme Ultraviolet (NA EUV) technology. The initiative aims to improve manufacturing efficiency and help the semiconductor industry fully use the capabilities of this advanced technology.
The partnership plans to establish a 12-inch photomask pilot line by 2031, supporting the broader lithography ecosystem's readiness for advanced-node production by 2033. The transition from existing 6-inch masks to larger 12-inch masks is expected to enhance the value of ASML’s High NA EUV technology by improving fab productivity, lowering chipmaking costs and removing stitching constraints for increasingly complex semiconductor designs.
ASML’s advanced semiconductor manufacturing systems are expected to play an important role as chip designs become more complex, particularly to support artificial intelligence (AI) applications. High-NA EUV adopters and other major suppliers have expressed interest in joining the initiative, supporting the development of a broader ecosystem around the platform.
The transition to larger-format photomasks could extend the technological and economic advantages of ASML’s lithography tools and reinforce the company’s role in developing technologies for future high-performance computing and AI processors.
How Are Competitors Faring?
ASML faces competition from Advanced Energy Industries, Inc. AEIS and Applied Materials, Inc. AMAT. Advanced Energy Industries is growing in the semiconductor market through its advanced power and control technologies. The company is benefiting from growing demand for semiconductor equipment and AI-related data-center infrastructure. Advanced Energy Industries is expanding its manufacturing capacity and ramping new products to support continued growth across its key markets.
Applied Materials is strengthening its semiconductor equipment portfolio to support the production of increasingly advanced chips. The company is investing in technologies such as advanced packaging, deposition and materials engineering to address growing demand for AI and high-performance computing. Applied Materials continues to reinforce its position in the semiconductor manufacturing industry through innovative products and collaborations.
ASML’s Price Performance, Valuation & Estimates
ASML shares have skyrocketed 122.5% over the past year compared with the industry’s growth of 120.8%.
From a valuation standpoint, ASML trades at a forward price-to-sales ratio of 11.85, above the industry tally of 10.99.
Earnings estimates for 2026 have increased 22.9% to $44.99 over the past 60 days, while the same for 2027 have risen 20% to $59.36.
Image Source: Zacks Investment Research
ASML currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Research Chief Names "Single Best Pick to Double"
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This company targets millennial and Gen Z audiences, generating nearly $1 billion in revenue last quarter alone. A recent pullback makes now an ideal time to jump aboard. Of course, all our elite picks aren’t winners but this one could far surpass earlier Zacks’ Stocks Set to Double like Nano-X Imaging which shot up +129.6% in little more than 9 months.
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This article originally published on Zacks Investment Research (zacks.com).

Can ASML's Tie-Up With TSM to Advance High NA EUV Drive Growth?

Lam Research Corporation LRCX has delivered an exceptional run over the past year, with its stock nearly tripling as strong AI-related semiconductor demand drives spending on chipmaking equipment.
LRCX has surged 192.8% over the past 12 months, easily outpacing the Zacks Electronics - Semiconductor industry’s 35.3% growth. The stock has also outperformed major industry peers, including Applied Materials, Inc. AMAT, Amkor Technology, Inc. AMKR and Broadcom Inc. AVGO, which have gained 180.6%, 92.4% and 3.6%, respectively, during the same period.
Lam Research One-Year Price Return performance
Such a massive rally naturally raises an important question: Can Lam Research stock continue to move higher after such a strong run?
LRCX still has upside potential. The stock is more expensive than it was a year ago, but its earnings outlook, exposure to AI infrastructure and strong position in advanced semiconductor manufacturing provide enough support for further gains.
AI Chip Demand Keeps Lam Research on a Strong Growth Path
Lam Research is an important part of the semiconductor supply chain ecosystem. The company supplies advanced equipment used by leading chipmakers, including Taiwan Semiconductor Manufacturing and Samsung, to manufacture sophisticated semiconductors.
This puts LRCX in a favorable position as AI chip production expands. The development of increasingly powerful AI processors is driving demand for advanced packaging, high-bandwidth memory (HBM) and more complex chip designs. These technologies require advanced etch and deposition equipment, areas in which Lam Research has significant expertise.
The company is also investing in new technologies to strengthen its competitive position. Its ALTUS ALD system is designed to improve manufacturing efficiency through molybdenum-based deposition, while the Aether platform helps chipmakers produce smaller and denser chip structures.
Lam Research expects advanced packaging revenues to grow more than 70% in 2026 after strong growth in 2025. Emerging technologies such as backside power distribution and dry-resist processing could provide additional growth opportunities as chip designs become more complex.
The strength of customer demand is already visible in Lam Research's results. The company has generated more than $5 billion in revenues for five consecutive quarters, including a record $6.72 billion in the latest reported financial results for the fourth quarter of fiscal 2026. The top-line performance consistency is important. It suggests that LRCX's growth is being supported by actual semiconductor investment rather than simply by excitement around AI.
Strong Earnings and Margin Gains Strengthen LRCX’s Bull Case
Lam Research's latest financial results provide another reason to remain bullish. The company’s fourth-quarter fiscal 2026 revenues increased 30% year over year to $6.72 billion, beating the Zacks Consensus Estimate by 0.7%. Non-GAAP earnings jumped 37% to $1.82 per share, exceeding the consensus estimate by 7.7%.
Lam Research Corporation Price, Consensus and EPS Surprise
Even more encouraging was the improvement in profitability. Non-GAAP gross margin increased 170 basis points year over year to 35% in the fourth quarter. Better pricing, operating efficiencies, scale benefits and a favorable product mix helped drive the improvement.
Non-GAAP operating margin was even stronger, rising 400 basis points to 38.4%. Higher gross margins, an expanded manufacturing footprint in Asia and disciplined cost management all contributed to the gain. This shows the company is not only witnessing growth in revenues but also converting that growth into stronger earnings and better margins.
Wall Street also expects the momentum to continue. The Zacks Consensus Estimate projects fiscal 2027 and 2028 revenues to increase 48.4% and 17.3%, respectively. Earnings per share are expected to grow 60.6% in fiscal 2027 and another 21.6% in fiscal 2028, highlighting the company's attractive long-term earnings potential.
Lam Research's Premium Valuation Looks Justifiable
LRCX does trade at a premium. It currently carries a Value Score of D, reflecting its expensive valuation.
Based on forward 12-month earnings, LRCX trades at 31.72X, significantly above the industry average of 13.64X. While that premium may appear expensive at first, it reflects the company's strong earnings outlook, AI-driven growth opportunities and consistent execution.
Lam Research Forward 12-Month P/E Ratio
Image Source: Zacks Investment Research
It also trades above industry peers, including Amkor Technology, Broadcom and Applied Materials. Amkor Technology, Broadcom and Applied Materials currently trade at forward 12-month P/E multiples of 17.83, 19.91 and 26.22, respectively.
Conclusion: LRCX Stock Is Still Worth Buying
Lam Research's nearly 193% gain over the past year makes the stock look expensive. However, the strong rally does not automatically mean that LRCX has run out of upside.
The company remains deeply tied to some of the strongest trends in semiconductors, including AI chips, HBM and advanced packaging. These trends are translating into record revenues, stronger margins and rapid earnings growth.
So, Lam Research stock is still worth buying despite nearly tripling over the past year.
LRCX currently carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
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