Is Applied Materials Stock Outperforming the Dow?

With a market cap of $366.4 billion, Applied Materials, Inc. (AMAT) provides manufacturing equipment, services, and software to the semiconductor, display, and related industries. The Santa Clara, California-based company operates through three segments: Semiconductor Systems; Applied Global Services; and Display and Adjacent Markets, enhancing device performance and efficiency.

Companies valued at $200 billion or more are generally considered “mega-cap” stocks, and Applied Materials fits this criterion perfectly. Applied Materials is renowned as the world's second-largest semiconductor equipment supplier, with advanced expertise in manufacturing technologies that drive innovation in chip fabrication and display production.

Shares of the semiconductor equipment company have pulled back 38.2% from its 52-week high of $739.67.  The stock is up 1.1% over the past three months, underperforming the broader Dow Jones Industrials Average's ($DOWI) 4.3% rise in the same period.

Shares of Applied Materials have surged 77.1% on a YTD basis over the same time frame, surpassing DOWI's 10.7% return. Also, the stock has jumped 175.3% over the past 52 weeks, compared to Dow Jones' 16.6% gain.

AMAT stock has been trading above its 50-day and 200-day moving averages since last year.

Applied Materials has significantly outperformed over the past year as AI-driven semiconductor investment has boosted demand for its advanced wafer fabrication equipment, particularly for HBM/DRAM memory and leading-edge logic chips. The company has also benefited from expanding margins, strong operational execution, and a growing high-margin services business.

The company reported Q3 2026 results on Aug. 13, with revenue of $9.12 billion, up 25% and above the estimate, driven by strong demand for semiconductor manufacturing equipment linked to AI chips. It forecast better-than-expected Q4 revenue of about $10.25 billion ± $500 million and adjusted EPS of $4.02 ± $0.20. Applied Materials also raised its 2026 packaging-revenue growth outlook to more than 70%, while expecting strong second-half growth in DRAM, leading-edge foundry-logic and advanced packaging, with customer visibility extending to 2030.

In comparison, rival Lam Research Corporation (LRCX) has slightly lagged behind AMAT stock on a YTD basis, with LRCX stock up 75.9%. However, LRCX stock has soared 189.3% over the past 52 weeks, outpacing AMAT's performance. 

Due to Applied Materials’ outperformance relative to the Dow over the past year, analysts remain bullish about the stock's prospects. The stock has a consensus rating of “Strong Buy” from the 38 analysts covering it, and the mean price target of $644.88 is a premium of 41.9% to current levels.