Is Applied Materials (AMAT) Expensive After Raising Its Growth Outlook? - Yahoo Finance

Applied Materials (AMAT) has delivered an impressive stock performance, with a 451.3% return over the past five years and 296.3% in the last year. Despite this strong run, its current valuation appear... Read original →

Applied Materials’ valuation has front-run the AI chip capex boom, with its 67.5x P/E trading ~15% above fundamentals despite trailing peers slightly. Technologically, surging demand for EUV and atomic-layer deposition at 3nm nodes amplifies AMAT’s strength—but also deepens exposure to TSMC (Taiwan, China) and Samsung’s aggressive expansions, which heighten reliance on China, where over 25% of revenue originates. Tightening U.S. export controls and rapid advances by domestic rivals like AMEC in etch/MOCVD raise compliance costs and delivery risks. Competitors such as Lam Research may exploit this by bundling etch-clean solutions, while ASML leverages EUV monopoly to lock in top-tier clients. Over the next 12–24 months, any slowdown in AI-related capex or escalation in geopolitical friction could trigger a sharper-than-average correction, given limited valuation cushion.