Applied Materials Stock Climbs 33% YTD: Time to Buy, Sell or Hold?

Applied Materials AMAT shares have climbed 33% year to date, outperforming the Zacks Electronics - Semiconductors industry and the Zacks Computer and Technology sector’s decline 5.5% and 11.5%, respectively.

AMAT YTD Performance Chart

Image Source: Zacks Investment Research

This outperformance has led AMAT stock to trade at a premium of 8.08X price-to-sales (P/S) multiple compared to the industry’s P/S multiple of 6.71X. AMAT’s premium valuation has been further implied by the Zacks Value Score of D.

AMAT Forward 12 Month (P/S) Valuation Chart

Image Source: Zacks Investment Research

Considering the current overvaluation and the sharp rise in share prices, investors want to know if it is the right time to buy, sell or hold the stock? Let’s discuss the financials and fundamentals of the company to understand what you should do with AMAT stock.

Demand for Logic, DRAM and Packaging Drives AMAT’s WFE

Applied Materials expects its leading-edge foundry, logic, DRAM and high-bandwidth memory (HBM) to be the fastest-growing wafer fabrication equipment (WFE) businesses in 2026. In Logic, AMAT’s revenues are driven by the shift from FinFET to Gate-All-Around transistors and backside power delivery.

AMAT’s DRAM offerings are gaining traction as customers are aggressively investing in 6F² nodes supported by rising demand for high bandwidth memory DRAM, driven by AI workloads. On its first-quarter 2026 earnings call, AMAT highlighted its record growth in both Logic and DRAM segments, driven by major semiconductor transitions.

Applied Materials expects future generations of HBM to adopt hybrid bonding, and in the hybrid bonding space, AMAT is one of the leading innovators. AMAT’s advanced packaging, particularly 3D chiplet stacking, is another structural tailwind as AI chips become more heterogeneous. As chips are becoming more complex, wafer fabrication now involves multiple fabrication steps.

AMAT has the broadest and most diversified offerings as it provides solutions across multiple fabrication steps, like deposition, materials engineering, etch, metrology and packaging. While its competitors serve only one or two verticals. This has enabled AMAT to carve out a place for itself in the WFE market.

AMAT’s Broad Product Portfolio Enables it to Protect Margins

AMAT competes with KLA Corporation KLAC, Lam Research LRCX and Camtek CAMT in the WFE and testing market. Applied Materials and KLA Corporation offer similar solutions, such as Wafer Inspection, Yield Enhancement and Process Control inspection systems, while Camtek stands at the forefront of semiconductor inspection and metrology solutions.

Camtek is focused on high-performance computing modules, advanced packaging and silicon carbide technologies. Lam Research develops Atomic Layer Deposition tools like AT200M, AT410 and AT650P that are similar to the devices made by AMAT. While Camtek, Lam Research and KLA Corporation overlap with Applied Materials, AMAT’s broad product portfolio enables it to seamlessly integrate its equipment across multiple processes.

AMAT’s integration of equipment across multiple processes reduces reliance on any single technology cycle and enables it to price its product stack better to protect margins. The Zacks Consensus Estimate for AMAT’s fiscal 2026 earnings implies growth of 17.8%. The estimates have been revised downward in the past seven days.

Image Source: Zacks Investment Research

Conclusion: Buy AMAT Stock Now

Applied Materials, with its broad portfolio of WFE products across deposition, materials engineering, etch, metrology, and packaging and traction across products like foundry, logic, DRAM and high-bandwidth memory, is a strong player in the semiconductor supply chain with strong opportunities. Given these conditions, we suggest that investors should buy this Zacks Rank #2 (Buy) stock at present. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

5 Stocks Set to Double

Each was handpicked by a Zacks expert as the #1 favorite stock to gain +100% or more in the coming year. While not all picks can be winners, previous recommendations have soared +112%, +171%, +209% and +232%.

Most of the stocks in this report are flying under Wall Street radar, which provides a great opportunity to get in on the ground floor.

Today, See These 5 Potential Home Runs >>

Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report

KLA Corporation (KLAC): Free Stock Analysis Report

Lam Research Corporation (LRCX): Free Stock Analysis Report

Applied Materials, Inc. (AMAT): Free Stock Analysis Report

Camtek Ltd. (CAMT): Free Stock Analysis Report

This article originally published on Zacks Investment Research (zacks.com).

Zacks Investment Research