Verdict
Overvalued
What is Applied Materials, Inc. (AMAT) worth?
Currently $564.55 — 64% premium to Dolphy’s fair value · ● live
Steady operator
medium confidence in the point estimate
● live · as of 2026-07-21 21:13 · Market cap $457.9B
As of 2026-07-15, Applied Materials, Inc. (AMAT) looks overvalued. Dolphy estimates a fair value of $345.00 versus a current price of $564.55 — a 64% premium to fair value.
Executive summary
Applied Materials (AMAT) is the broadest, highest-quality franchise in semiconductor capital equipment — etch, deposition, CMP, implant, process control and advanced packaging — with ~49% gross margin, ~40% ROE, a net-cash balance sheet and a growing, sticky services (AGS) business. It is a genuinely excellent business. The problem is price. At $576.77 (as of 2026-07-15) the stock trades at ~54x trailing and ~34x forward earnings, roughly 45x EV/EBITDA — multiples that dwarf both its own history (~15-20x) and today's best-in-class peers (~22-28x). Our intrinsic-value work (DCF, EV/EBITDA and P/E comps, scenario weighting) clusters around $220-500 with a point estimate near $345, implying the shares carry a ~40% premium to fair value. A reverse-DCF is the tell: the price already discounts ~45% annual FCF growth for five years, which no cyclical semi-cap company delivers. This is a fine company priced for a flawless AI supercycle; we see it as overvalued, not broken.
How we value it
DCF + peer comps (EV/EBITDA & P/E), cross-checked with reverse-DCF and scenario weighting
Every figure is computed from SEC filings by the analyst’s calculator tools and fact-checked by a second, independent model.
Investment thesis
About Applied Materials, Inc.
Applied Materials, Inc. provides materials engineering solutions, equipment, services, and software to the semiconductor and related industries in the United States, China, Korea, Taiwan, Japan, Southeast Asia, Europe, and internationally. The company operates through Semiconductor Systems and Applied Global Services (AGS) segments. The Semiconductor Systems segment includes semiconductor capital equipment to enable materials engineering steps, including etch, rapid thermal processing, deposition, chemical mechanical planarization, metrology and inspection, wafer packaging, and ion implantation. The AGS segment offers integrated solutions to optimize equipment and fab performance and productivity comprising spares, upgrades, services, and 200 millimeter and other equipment and factory automation software for semiconductor and other products. It serves manufacturers of semiconductor wafers and chips, and other electronic devices. Applied Materials, Inc. was incorporated in 1967 and is headquartered in Santa Clara, California.
Frequently asked questions
Is AMAT a buy?
As of 2026-07-15, Applied Materials, Inc. (AMAT) looks overvalued. Dolphy estimates a fair value of $345.00 versus a current price of $564.55 — a 64% premium to fair value.
What is AMAT's fair value?
Dolphy's estimated fair value for Applied Materials, Inc. (AMAT) is $345.00, versus a current market price of $564.55.
Is AMAT overvalued or undervalued?
Applied Materials, Inc. (AMAT) currently looks overvalued — trading at a 64% premium to Dolphy's estimated fair value of $345.00.
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AI-generated research by Dolphy for educational and informational purposes only — not investment advice. Figures are computed from public sources and may contain errors.