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Applied Materials (AMAT) Outpaces Stock Market Gains: What You Should Know

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In the latest trading session, Applied Materials (AMAT - Free Report) closed at $136.80, marking a +1.41% move from the previous day. This move outpaced the S&P 500's daily gain of 0.35%.

Prior to today's trading, shares of the maker of chipmaking equipment had lost 1.4% over the past month. This has lagged the Computer and Technology sector's gain of 5.62% and the S&P 500's gain of 3.64% in that time.

Investors will be hoping for strength from AMAT as it approaches its next earnings release. The company is expected to report EPS of $1.76, up 66.04% from the prior-year quarter. Our most recent consensus estimate is calling for quarterly revenue of $5.92 billion, up 34.7% from the year-ago period.

For the full year, our Zacks Consensus Estimates are projecting earnings of $6.55 per share and revenue of $22.65 billion, which would represent changes of +57.07% and +31.67%, respectively, from the prior year.

Any recent changes to analyst estimates for AMAT should also be noted by investors. These revisions typically reflect the latest short-term business trends, which can change frequently. As a result, we can interpret positive estimate revisions as a good sign for the company's business outlook.

Research indicates that these estimate revisions are directly correlated with near-term share price momentum. We developed the Zacks Rank to capitalize on this phenomenon. Our system takes these estimate changes into account and delivers a clear, actionable rating model.

The Zacks Rank system ranges from #1 (Strong Buy) to #5 (Strong Sell). It has a remarkable, outside-audited track record of success, with #1 stocks delivering an average annual return of +25% since 1988. Over the past month, the Zacks Consensus EPS estimate has moved 0.32% higher. AMAT is holding a Zacks Rank of #2 (Buy) right now.

Looking at its valuation, AMAT is holding a Forward P/E ratio of 20.6. This represents a premium compared to its industry's average Forward P/E of 19.84.

Meanwhile, AMAT's PEG ratio is currently 1.15. This metric is used similarly to the famous P/E ratio, but the PEG ratio also takes into account the stock's expected earnings growth rate. Semiconductor Equipment - Wafer Fabrication stocks are, on average, holding a PEG ratio of 1.15 based on yesterday's closing prices.

The Semiconductor Equipment - Wafer Fabrication industry is part of the Computer and Technology sector. This group has a Zacks Industry Rank of 67, putting it in the top 27% of all 250+ industries.

The Zacks Industry Rank gauges the strength of our individual industry groups by measuring the average Zacks Rank of the individual stocks within the groups. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.

To follow AMAT in the coming trading sessions, be sure to utilize Zacks.com.


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