Applied Materials stock forecast
The Applied Materials weighted forecast points to losses: $352.91 in October 2027 and $384.53 in October 2029, including dividends. Applied Materials hinges on durable AI-led demand, production wins and cash generation.
Where could shares of Applied Materials be by 2029?
Weighted value is $352.91 in October 2027, a -29% return. It is $384.53 in October 2029, a -23% return. Both returns include dividends. Bear probability is 25%. Base probability is 55%. Bull probability is 20%. October 2029 case prices range from $219.28 in bear to $619.43 in bull.
| Case | Probability | October 2027 | October 2028 | October 2029 |
|---|---|---|---|---|
| Bear | 25% | 221.59 (-56%) | 177.42 (-64%) | 219.28 (-56%) |
| Base | 55% | 355.44 (-29%) | 368.49 (-26%) | 374.23 (-25%) |
| Bull | 20% | 510.84 (+1%) | 570.35 (+13%) | 619.43 (+24%) |
| Weighted | 100% | 352.91 (-29%) | 361.09 (-28%) | 384.53 (-23%) |
What has to go right—and wrong for Applied Materials?
The bear case gives operating profit of $9,570 million, $8,525 million and $9,860 million as revenue falls, utilization weakens and operating leverage bites. The bull case gives $12,480 million, $14,256 million and $15,840 million as AI, DRAM, packaging and leading-edge investment become repeat orders. Q3 DRAM growth was 52%, and foundry-and-logic revenue reached a record, supporting the upside but not proving a full-cycle result.
| October 2027 | October 2028 | October 2029 | |
|---|---|---|---|
| Normal operating profit | 11,100 (9,570 / 12,480) | 11,900 (8,525 / 14,256) | 12,505 (9,860 / 15,840) |
| Shares (millions) | 791 (795 / 788) | 788 (795 / 784) | 786 (796 / 779) |
| Dividends per share | 2.27 (2.12 / 2.36) | 2.50 (1.59 / 2.71) | 2.75 (1.59 / 3.13) |
| Enterprise value to normal operating profit | 25.00 (18.00 / 32.00) | 24.00 (16.00 / 31.00) | 23.00 (17.00 / 30.00) |
| Net debt | -3,545 (-3,841 / -3,390) | -4,769 (-4,722 / -4,990) | -6,491 (-6,949 / -7,585) |
How much cash does Applied Materials really make?
Operating cash flow records money collected from customers after cash payments to employees, suppliers and governments. Free cash flow then subtracts capital spending on facilities and equipment. A stricter measure also subtracts stock compensation, because employees receive ownership with economic value even though the award requires no immediate cash payment.
The sensible measure is therefore a multi-year cash record. Average free cash flow across 2021–2025 is useful, but it still combines different demand conditions and investment stages. Applied has not disclosed enough to separate maintenance spending from expansion spending, so sustainable cash generation remains an estimate.
| Oct 2025 | Oct 2024 | Oct 2023 | Oct 2022 | Oct 2021 | |
|---|---|---|---|---|---|
| Cash from operations | 7,958 | 8,677 | 8,700 | 5,399 | 5,442 |
| − Capital spending | 2,260 | 1,190 | 1,106 | 787 | 668 |
| = Free cash flow | 5,698 | 7,487 | 7,594 | 4,612 | 4,774 |
| − Stock pay | 668 | 577 | 490 | 413 | 346 |
| = Real free cash flow | 5,030 | 6,910 | 7,104 | 4,199 | 4,428 |
| Real free cash flow, % of revenue | 17.7% | 25.4% | 26.8% | 16.3% | 19.2% |
What does an investor pay for Applied Materials today?
Revenue growth slowed from 34.1% in FY2021 to 4.4% in FY2025, while operating margin stayed near 29%–30%. Applied’s computed free cash flow—cash from operations minus capital spending—fell as a share of revenue in FY2025. Real free cash flow per share fell while diluted EPS held up. At $507.03 a share, trailing P/E is 43.7x and next-twelve-month P/E is 27.1x. Free cash flow yield is 1.4%; dividend yield is 0.4%. Buybacks reduced the share count but cannot replace cash generation.