AMAT
APPLIED MATERIALS INC /DENasdaqThree independently researched cases — bear, base, and bull — generated automatically from published financials. Every assumption is justified and cited; the discount rate is computed from researched market inputs.
Valuation history every run
History builds as the valuation is recalculated — this is the first recorded run.
Market vs intrinsic value as of valuation
Compared against the researched share price for AMAT; recalculate the valuation to refresh it.
Base inputs from financials
source period →Base revenue (TTM)
$29B
Diluted shares
799,000,000
Net cash
-$154M
Bear
low confidence$74.11
IV / share
-86.4% vs $546.50
Revenue growth18.0% → 5.0% → -4.0% → 2.0% → 3.0%medium
Assumes the guided Q3/Q4 backlog still converts in year one but the AI-driven WFE build-out peaks in 2027 and rolls into a classic equipment digestion cycle, mirroring the double-digit revenue declines AMAT posted in 2012, 2013 and 2019.
Operating margin26.0%medium
In a volume downturn AMAT reverts toward the low end of its recent observed range (the 25.2% posted in Q4 FY2025) as fixed cost absorption worsens and the higher-margin China service mix shrinks under export controls.
Tax rate19.0%medium
Assumes AMAT's Singapore tax incentives erode and OECD Pillar Two plus the US corporate alternative minimum tax push the cash rate well above the ~12% it enjoyed in FY2023-24, toward the US statutory level.
Reinvestment rate22.0%low
Low forecast growth needs little incremental capital, but the in-flight EPIC campus and capacity spend keeps reinvestment from falling further while returns on that capital disappoint in a downcycle.
Terminal growth2.0%medium
Treats semiconductor equipment as a mature, capital-intensity-capped cyclical that grows roughly with inflation once the AI capacity build is complete.
Base
medium confidence$115.94
IV / share
-78.8% vs $546.50
Revenue growth28.0% → 16.0% → 9.0% → 6.0% → 4.5%high
Year one catches up to the guided ~$9B quarterly run-rate off a lagging $29.0B trailing base, then tracks SEMI's decelerating WFE curve as the AI capacity build matures into mid-single-digit trend growth.
Operating margin30.5%high
Holds margins near the 30-32% level AMAT has actually sustained across FY2025-26, assuming the record ~50% gross margin persists but is partly offset by elevated R&D as leading-edge intensity rises.
Tax rate16.0%medium
Normalizes between AMAT's structurally low ~12% pre-2025 rate and the distorted 24.5% FY2025 print, reflecting continued but gradually diluted Singapore incentives under Pillar Two.
Reinvestment rate32.0%medium
Funds roughly 12% average annual growth at AMAT's historically high incremental returns on capital, including the EPIC campus and manufacturing capacity build now depressing near-term free cash flow.
Terminal growth2.8%medium
Assumes semiconductor equipment compounds modestly faster than inflation in perpetuity as chip content per device keeps rising, while staying well below the risk-free rate ceiling.
Bull
low confidence$151.91
IV / share
-72.2% vs $546.50
Revenue growth34.0% → 24.0% → 16.0% → 10.0% → 7.0%medium
Assumes the AI capex supercycle runs multi-year at Morgan Stanley's higher trajectory and AMAT gains share in gate-all-around, backside power and advanced packaging, where it guides to >50% growth.
Operating margin33.5%medium
Sustained volume leverage on a fixed R&D and manufacturing base plus a richer leading-edge and packaging mix pushes margins a few points above the record 31.9% just posted.
Tax rate14.0%medium
Assumes AMAT's renewed Singapore incentive agreements largely hold, keeping the cash tax rate close to the low-teens level it actually paid in FY2023-FY2024.
Reinvestment rate40.0%medium
Much faster growth requires proportionally more capacity, R&D and working capital, but it is deployed at AMAT's high incremental returns so the higher spend still creates value.
Terminal growth3.5%low
Assumes structurally higher steady-state semiconductor capital intensity from AI and advanced packaging lets the industry outgrow nominal GDP indefinitely, still capped below the risk-free rate.
Market inputs researched
Midpoint of the current 10-year US Treasury yield, the standard long-duration risk-free proxy matching a USD DCF horizon.
Central estimate across published providers, consistent with AMAT's high cyclicality — a 41% drawdown from its June 2026 high of $739.67 in about a month.
Uses Damodaran's forward-looking implied premium rather than a historical average, so it reflects current market prices and expected cash flows.
Most recent available close, used to compare intrinsic value against the market price.
Generated 8/5/2026, 3:11:45 PM · pipeline v1.0.0