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Here's How Much You'd Have If You Invested $1000 in Applied Materials a Decade Ago

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How much a stock's price changes over time is a significant driver for most investors. Not only can price performance impact your portfolio, but it can help you compare investment results across sectors and industries as well.

Another factor that can influence investors is FOMO, or the fear of missing out, especially with tech giants and popular consumer-facing stocks.

What if you'd invested in Applied Materials (AMAT - Free Report) ten years ago? It may not have been easy to hold on to AMAT for all that time, but if you did, how much would your investment be worth today?

Applied Materials' Business In-Depth

With that in mind, let's take a look at Applied Materials' main business drivers.

Headquartered in Santa Clara, California, Applied Materials is one of the world’s largest suppliers of equipment for the fabrication of semiconductor, flat panel liquid crystal displays (LCDs), and solar photovoltaic (PV) cells and modules. The company also offers deployment and support services related to the equipment supplied.

In fiscal year 2020, Applied reported results in three segments—Semiconductor Systems (62% of total 2020 revenue), Applied Global Services (26%) and Display and Adjacent Markets (12%).

Applied Materials’ Silicon segment offers equipment for front-end operations in the semiconductor manufacturing process. Front-end processes involve the deposition or implantation of multiple thin layers of electronically conductive, semiconductive and insulating materials onto and within a silicon wafer with the help of photomasks (reticles) to give multiple copies of integrated circuit devices.

With over 33,000 systems installed, the Applied Global Services segment goes a long way to ensure customer satisfaction and support. There are primarily three kinds of services offered.

Applied has developed technologies for significantly larger-sized wafers made of materials other than silicon. This has helped it expand its portfolio into equipment for thin film transistor (TFT) LCDs (made from glass) and OLED, which are used in smartphones, TVs and other consumer electronic devices. The company operates this business under the Display segment.

The Energy and Environmental Solutions segment primarily consists of the solar product line. Currently, the company offers equipment for manufacturing both wafer-based crystalline silicon (c-Si) and glass-based thin film used in the solar PV cell fabrication process.

Being a leading producer of specialized equipment, most of the competition comes from other large equipment makers, such as KLAC and LRCX.

 

Bottom Line

Anyone can invest, but building a successful investment portfolio takes a combination of a few things: research, patience, and a little bit of risk. So, if you had invested in Applied Materials a decade ago, you're probably feeling pretty good about your investment today.

A $1000 investment made in April 2011 would be worth $8,976.77, or a gain of 797.68%, as of April 8, 2021, according to our calculations. This return excludes dividends but includes price appreciation.

Compare this to the S&P 500's rally of 205.96% and gold's return of 13.30% over the same time frame.

Looking ahead, analysts are expecting more upside for AMAT.

Applied Materials is driven by strong momentum across Semiconductor Systems and Applied Global Services. Further, solid demand for silicon in several applications across various markets remains a tailwind. Additionally, growing momentum among long-term service agreements is contributing well. Furthermore, increased customer spending in foundry and logic on the back of rising need for specialty nodes in automotive, power, 5G rollout, IoT, communications and image sensor markets, is a major positive. Also, strong momentum in conductor etches is benefiting the company’s position in DRAM and NAND. Notably, the stock has outperformed the industry it belongs to over a year. However, market uncertainties continue to persist. Further, mounting expenses are concerns. Also, rising competition poses risk to the company’s market position.

The stock is up 22.17% over the past four weeks, and no earnings estimate has gone lower in the past two months, compared to 10 higher, for fiscal 2021. The consensus estimate has moved up as well.


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