AMAT
Applied Materials, Inc.
Technology · Semiconductor Equipment & Materials · United States · Stock
Score Breakdown
Scored for Dividend Income profile
Sub-scores are 0–20 each; Model Score is weighted by your selected investment goal. How it works →
Why Ranked Here
- The composite score of 65.6 is anchored by two near-maximum sub-scores — dividend at 18.8 and profitability at 18.4 — which together account for the majority of the score and reflect genuine FCF strength and margin quality as reported in the FY2025 10-K.
- The financial health sub-score of 16.0 contributes meaningfully and is consistent with a company that carries leverage at levels where interest coverage remains robust, preventing any significant penalty to the overall score.
- The model's best-fit profile for Applied Materials is dividend income at 78.1, confirming that the scoring engine finds the strongest alignment between this company's filing-derived metrics and the characteristics expected of a reliable dividend-paying research candidate.
Why Not Higher
- The growth sub-score of 8.5 out of 20 represents a significant drag on the composite score, indicating that FY2025 filing data did not show strong year-over-year expansion in revenue, net income, or EPS, which is a prerequisite for scoring above the 75-plus range.
- The theme sub-score of 0.0 out of 20 adds a further 20-point ceiling constraint on the composite, as the model found no macro theme exposures mappable to the FY2025 10-K, meaning the company misses the thematic scoring layer entirely regardless of its operational quality.
Data Confidence
10 / 10
Very High — full data coverage
Research Summary
AI-generated analysis reflects data and conditions as of the report date shown above. Verify any specific figures through primary sources before acting on this analysis.
Applied Materials, Inc. is the world's largest supplier of semiconductor fabrication equipment, materials engineering solutions, and related services, serving chipmakers across logic, memory, and display markets globally. The company's FY2025 10-K data yields a model score of 65.6/100, driven most strongly by its dividend sub-score (18.8/20) and profitability sub-score (18.4/20), reflecting a business that generates substantial free cash flow, sustains healthy net and operating margins, and has demonstrated a consistent, growing dividend per share track record. The financial health sub-score (16.0/20) further supports the view that Applied Materials carries a manageable leverage profile with strong interest coverage, while the momentum sub-score (10.8/20) suggests quarterly operational improvement has been present but not exceptional in the most recent filing period. The key research tradeoff is that this is a high-quality, cash-generative industrial technology franchise that scores best as a dividend income research candidate rather than a growth or aggressive-growth candidate — its growth sub-score of 8.5/20 signals that year-over-year revenue, net income, and EPS expansion have been modest in the filing period, and a theme sub-score of 0.0/20 indicates the model found no mapped macro theme exposures in the filing data, which constrains the overall composite score from reaching higher tiers.
Plain English
Applied Materials makes the machines that semiconductor factories use to build chips — essentially, no chip gets made without equipment like theirs. The model gives it a 65.6 out of 100, meaning it is a solid, financially healthy company that pays a reliable and growing dividend, but it is not showing the kind of rapid revenue growth that would push it into the highest-scoring tier. The Very Low risk rating tells a researcher that the filing data shows a conservative balance sheet and strong cash generation, meaning the financial foundation here looks stable rather than fragile.
Bull Case vs. Bear Case
Bull Case
- The dividend sub-score of 18.8 out of 20 reflects exceptional free cash flow coverage of the dividend, a sustained multi-year streak of dividend per share growth, and a low FCF payout ratio — all sourced directly from FY2025 EDGAR filing data — making this a standout research candidate for dividend income strategies.
- The profitability sub-score of 18.4 out of 20 indicates that Applied Materials maintains high net and operating margins alongside strong return on assets, consistent with a company that retains significant pricing power and operational efficiency in its semiconductor equipment business.
- The financial health sub-score of 16.0 out of 20 suggests a well-managed capital structure with strong interest coverage and a balance sheet capable of supporting continued shareholder returns and R&D investment even in a cyclically challenging environment.
Bear Case
- The growth sub-score of 8.5 out of 20 is the weakest fundamental sub-score in the model and indicates that year-over-year revenue, net income, and EPS growth have been subdued in the FY2025 filing period, which limits the case for this being a high-conviction growth research candidate.
- The momentum sub-score of 10.8 out of 20 — which measures quarterly operational improvement in revenue, earnings, and margins from EDGAR filings rather than price action — suggests that the trajectory of operational improvement has been inconsistent or modest in recent quarters.
- The theme sub-score of 0.0 out of 20 means the model identified no mapped macro theme exposures in the FY2025 10-K filing, which penalizes the composite score materially and may reflect a filing presentation that does not explicitly align with the model's catalogued macro themes despite the company's real-world role in the semiconductor supply chain.
What Could Change the Picture
Bullish Triggers
- A return to stronger year-over-year revenue and EPS growth in a subsequent 10-K filing — potentially driven by an upcycle in semiconductor capital expenditure from major foundry customers — would directly improve the growth sub-score from its current 8.5 and lift the composite meaningfully.
- Continued or accelerating dividend per share growth combined with sustained FCF coverage in future filings would further reinforce the already-high dividend sub-score and strengthen the dividend income research thesis.
Bearish Triggers
- A deterioration in operating or net margins in a future 10-K, whether from pricing pressure, rising input costs, or a demand slowdown in semiconductor equipment spending, would erode the profitability sub-score of 18.4 and weaken the primary pillar supporting the current composite score.
- Any meaningful increase in leverage — reflected in a higher leverage ratio or declining interest coverage in a future filing — would compress the financial health sub-score below its current 16.0 and increase the overall risk profile, potentially altering the Very Low risk rating.
Risk Profile
Very Low RiskThe Very Low risk rating reflects that Applied Materials' FY2025 EDGAR filing data shows a conservative leverage ratio, strong interest coverage, and free cash flow generation that comfortably covers its dividend obligations, indicating the company's financial structure is well-insulated against moderate operational stress. This rating is specific to the filing-derived balance sheet and cash flow characteristics and does not account for external market or macroeconomic variables.
Key Catalysts to Watch
The key filing-derived factor to watch for Applied Materials is the trajectory of revenue and earnings growth in future 10-K filings, as an improvement in the growth sub-score from its current 8.5 would be the most impactful single change to the composite model score. Additionally, any evolution in how the company's business segments are described in future filings that allows the model to map macro theme exposures would unlock the currently zero theme sub-score and represent a significant upside catalyst to the overall research ranking.
This report is for educational and research purposes only. It does not constitute financial, investment, legal, or tax advice — always conduct your own due diligence before making investment decisions.