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    Will AI-Fueled Equipment Demand and Dividend Hike Change Applied Materials' (AMAT) Core Investment Narrative?

    Simply Wall St·12/20/2025 23:28:13
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    • Applied Materials recently announced that its Board of Directors approved a quarterly cash dividend of US$0.46 per share, payable on March 12, 2026 to shareholders of record on February 19, 2026, alongside record fiscal 2025 results and higher capital spending plans for 2026.
    • At the same time, a wave of positive analyst research highlighting AI-driven semiconductor equipment demand, advanced packaging leadership, and resilient margins has reinforced Applied Materials’ role at the center of the industry’s next manufacturing upgrade cycle.
    • We’ll now examine how this analyst optimism around AI-related equipment demand and margin strength could influence Applied Materials’ existing investment narrative.

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    Applied Materials Investment Narrative Recap

    To own Applied Materials, you need to believe AI-driven wafer fab and advanced packaging spending will keep requiring its tools while margins stay resilient despite cycles. The recent dividend affirmation and analyst optimism support confidence in near term cash generation, but they do not materially change the key catalyst of AI-related equipment demand or the biggest risk from China export and licensing uncertainty.

    The most relevant update here is Applied Materials’ record fiscal 2025, capped by the highest non GAAP gross margin in 25 years and a planned 93% increase in 2026 capital spending. That combination has underpinned the flurry of analyst target hikes tied to AI infrastructure, reinforcing the view that sustained AI capex and advanced packaging adoption remain central to the stock’s thesis over the next few years.

    Yet investors also need to weigh the growing risk that tighter China export controls and share loss in that market could...

    Read the full narrative on Applied Materials (it's free!)

    Applied Materials' narrative projects $32.5 billion revenue and $9.2 billion earnings by 2028.

    Uncover how Applied Materials' forecasts yield a $248.44 fair value, a 3% downside to its current price.

    Exploring Other Perspectives

    AMAT 1-Year Stock Price Chart
    AMAT 1-Year Stock Price Chart

    Nineteen members of the Simply Wall St Community currently see fair value for Applied Materials between US$150 and about US$248 per share, highlighting wide disagreement on upside. You may want to compare these views with the AI driven equipment demand catalyst and its sensitivity to export licenses, to see how different assumptions could influence the company’s performance.

    Explore 19 other fair value estimates on Applied Materials - why the stock might be worth as much as $248.44!

    Build Your Own Applied Materials Narrative

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    This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.