Stock Analysis | Applied Materials Outlook - Technical Weakness, Mixed Analysts, and Rising Geopolitical Risks

Market Snapshot

Headline Takeaway: Applied Materials faces a mixed outlook, with weak technical indicators and a recent price decline of -1.37%, while recent news highlights rising tariffs on semiconductors. Investors should watch for shifts in trade policy and company fundamentals.

News Highlights

• Trump Announces 100% Tariff on Semiconductors: U.S. President Donald Trump announced a 100% tariff on semiconductor imports, sparking concern across the sector. This could impact Applied Materials' global supply chain and market access.
• Applied Joins Apple and TI in U.S. Chip Manufacturing: Applied Materials is expanding its U.S. manufacturing footprint with a $200 million investment in Arizona, supplying American-made equipment for semiconductors used in Apple products. This move could offset some of the tariff risks by reinforcing domestic production.
• India's Semiconductor Market Expected to Grow Significantly: The Indian semiconductor market is projected to grow to Rs 9.6 lakh crore by 2030. While this doesn’t directly impact Applied Materials, it suggests global supply chain diversification that could affect future demand for equipment and materials.

Analyst Views & Fundamentals

Analysts remain divided on Applied Materials. The simple average rating is 3.00, while the performance-weighted rating is 2.03, indicating a more neutral outlook when adjusted for historical accuracy. The rating consistency is low, with two out of two recent analysts assigning "Neutral" ratings. This contrasts with the current price trend, which shows a decline, suggesting analysts and the market are not aligned.

Key Fundamental Factors

• Net Cash Flow from Operating Activities Per Share (YoY Growth Rate %): 33.45% – internal diagnostic score: 1/10
• Net Profit Attributable to Parent Company Shareholders / Net Profit (%): 100.00% – internal diagnostic score: 1/10
• Accounts Receivable Turnover Ratio: 2.50x – internal diagnostic score: 2/10
• GMAR: 49.08% – internal diagnostic score: 2/10
• Cash-UP: 60.91% – internal diagnostic score: 3/10
• Interest Coverage Ratio (EBIT / Interest Expense %): 34.64x – internal diagnostic score: 2/10
• Total Assets Turnover Ratio: 0.42x – internal diagnostic score: 1/10
• Net Profit Attributable to Parent Company Shareholders (YoY Growth Rate %): -11.20% – internal diagnostic score: 3/10
• Inventory Turnover Days: 136.85 days – internal diagnostic score: 2/10

Money-Flow Trends

Big money is showing positive sentiment, with an overall inflow ratio of 51.94% and a block inflow ratio of 52.42%, suggesting institutional confidence. In contrast, retail investors are divided, with small inflow ratios ranging from 49.33% to 49.90%. This suggests that while professional investors are slightly optimistic, the broader market remains cautious.

Key Technical Signals

Applied Materials is showing weak technical signals, with an overall technical score of 2.15 (internal diagnostic score, 0-10). The technical analysis highlights a bearish bias, with 2 bearish indicators and 0 bullish indicators. Key signals include:

• WR Oversold – internal diagnostic score: 3.11/10 (neutral to bullish, recurring on 7/23, 7/22, 7/25, 7/24, and 7/29)
• Bearish Engulfing – internal diagnostic score: 1.19/10 (bearish, seen on 7/29)

Recent patterns suggest a lack of strong momentum, with weak chart signals and a high bearish dominance. Investors should consider the risk of further downside in the short term.

Conclusion

Applied Materials is currently in a weak technical environment and faces rising geopolitical risks, including potential new U.S. semiconductor tariffs. While big money remains slightly positive, the fundamentals show mixed signals and analysts remain neutral. Investors should consider waiting for a pull-back or clearer catalysts before entering new positions. Watch for any updates on trade policy and earnings reports for further clarity.