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Here's How Much a $1000 Investment in Applied Materials Made 10 Years Ago Would Be Worth Today

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For most investors, how much a stock's price changes over time is important. Not only can it impact your investment portfolio, but it can also help you compare investment results across sectors and industries.

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 2022, Applied reported results in three segments—Semiconductor Systems (73% of total 2022 revenue), Applied Global Services (22%) and Display and Adjacent Markets (5%).

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

Putting together a successful investment portfolio takes a combination of research, patience, and a little bit of risk. For Applied Materials, if you bought shares a decade ago, you're likely feeling really good about your investment today.

According to our calculations, a $1000 investment made in September 2013 would be worth $9,511.93, or an 851.19% gain, as of September 11, 2023. Investors should keep in mind that this return excludes dividends but includes price appreciation.

In comparison, the S&P 500 gained 169.31% and the price of gold went up 35.22% over the same time frame.

Analysts are anticipating more upside for AMAT.

Applied Materials’ fiscal third quarter results were driven by record sales of 200-mm systems. Moreover, strength in Applied Global Services (AGS) segment owing to solid adoption of 200-mm systems and strengthening subscription business, was a plus. Notably, the stock has outperformed its industry on a year-to-date basis. AMAT remains optimistic about its strategies and investments in IoT and AI. Additionally, its strength in IoT, Communications, Auto, Power and Sensors (ICAPS) is likely to continue aiding its position in the semiconductor industry in the days ahead. Further, its broad-based, diversified portfolio and strong services business remain its key growth drivers. However, sluggishness in its Display segment remains a concern. Also, weakening demand environment and inflationary pressure are headwinds.

Over the past four weeks, shares have rallied 6.27%, and there have been 11 higher earnings estimate revisions in the past two months for fiscal 2023 compared to none lower. The consensus estimate has moved up as well.

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