AMAT (Applied Materials, Inc.): Themes, ETFs, and Basket Ideas
AMAT is the ticker for Applied Materials, Inc.. This page covers what the company does, where it's heading, its approximate earnings and valuation, key competitors, the themes it belongs to, the ETFs that hold it, and similar stocks worth looking at.
What does Applied Materials, Inc. do?
Applied Materials is the largest semiconductor equipment company in the world by revenue. The company manufactures the wafer fabrication equipment that semiconductor fabs use to deposit, etch, polish, and inspect silicon wafers. AMAT does not make lithography systems (ASML has that monopoly) but is essentially everywhere else in the fab equipment market.
Key product areas include deposition (chemical vapor deposition, physical vapor deposition, atomic layer deposition for advanced nodes), etch (removing material in precise patterns), chemical mechanical polishing (CMP, smoothing wafer surfaces), implant (introducing dopants), and inspection (defect detection). AMAT also has an emerging display equipment business and a service business that generates recurring revenue from installed tool base. Founded in 1967, headquartered in Santa Clara, California. Gary Dickerson has been CEO since 2013.
Where is Applied Materials, Inc. heading?
1. Leading-edge logic and memory capex.
Every new advanced semiconductor fab (TSMC Arizona, Intel Ohio, Samsung Texas, Micron New York) requires substantial AMAT equipment. AI-driven leading-edge capex is the primary demand driver.
2. Trailing-edge capacity expansion.
Mature node capacity (28nm and above) is also expanding globally, driven by automotive electrification, industrial automation, and CHIPS Act-incentivized reshoring. AMAT participates across both leading and trailing edge.
3. Service revenue durability.
AMAT generates substantial recurring service revenue from the installed base of tools. Service revenue is high-margin and provides earnings stability across capex cycles.
4. Advanced packaging.
Chiplet-based designs and advanced packaging (e.g., CoWoS used in NVIDIA's H100) require new equipment categories where AMAT has been investing. This is a smaller but high-growth segment.
Risks worth tracking: Semiconductor capex is cyclical. China exposure (where export controls have already cut some revenue) is the largest single near-term risk; further restrictions could expand.
Earnings and valuation (approximate, early 2026)
A simple financial snapshot. These are approximations and refresh quarterly; for current figures see Applied Materials, Inc.'s investor relations page or your broker.
- Revenue (TTM): ~$28 billion
- Operating margin: ~30%
- Net income (TTM): ~$8 billion
- EPS (TTM): ~$9.50
- P/E (TTM): ~22x
- Price to sales: ~6x
- Dividend yield: ~1.0%
- Free cash flow: ~$7 billion annually
- Service revenue: Approximately 25% of total, recurring
AMAT trades at a more modest multiple than fabless designers or NVIDIA, reflecting the cyclical nature of equipment spending. The premium versus the S&P 500 average comes from the structural growth in semiconductor capex and the service revenue durability.
Themes AMAT belongs to
These are the investment theses AMAT naturally fits into. Each links to a full theme guide listing every other stock that belongs and the ETFs commonly used as a passive proxy.
ETFs that hold AMAT
AMAT's competitors
Wafer fabrication equipment
Lam Research is the primary competitor across etch, deposition, and CMP. KLA dominates inspection and metrology. Tokyo Electron (TEL) is a Japanese competitor across multiple equipment categories. Together with AMAT, these are the four largest fab equipment companies.
Specific equipment categories
Lithography is dominated by ASML (no AMAT competition). Atomic layer deposition has competition from ASM International. Each equipment category has 2-4 credible suppliers; AMAT is in most of them.
Similar stocks
Other names that show up alongside AMAT in the same themes. Worth a look if you're thinking about diversification within a single thesis rather than concentration on one ticker.
Also fits AI infrastructure. The defining AI accelerator. CUDA ecosystem is the picks-and-shovels play; held in every AI infrastructure basket.
Also fits AI infrastructure. MI300X and MI400 are the most credible non-NVIDIA accelerator path. Datacenter GPU revenue is the AI exposure.
Also fits AI infrastructure. Custom AI silicon (Google TPU, Meta MTIA) plus the networking switches that connect AI clusters. Dual-engine AI infra story.
Also fits AI infrastructure. Makes virtually every leading-edge AI chip including NVIDIA H100/B100, AMD MI300X, and the hyperscaler custom designs.
Using AMAT in a Walnut basket
The most useful question to ask about a single stock is rarely “will it go up?”. It's “does this fit a thesis I actually believe in, and how do I size it alongside other stocks that fit the same thesis?” That's what Walnut is built for.
Open the AI assistant on Walnut and describe a thesis (for example: “the AI infrastructure buildout”, “dividend growth large-caps”, “global semiconductors”) where AMAT would naturally fit. The AI proposes 5 to 6 constituents with target weights, you review, and you can fund the basket through your broker once you're ready.
Build a basket around AMAT with Walnut
Use Applied Materials, Inc. as one constituent in a thematic basket Walnut's AI helps you assemble. Describe a thesis you believe in, the AI proposes the holdings and weights, and you approve before any broker order.
FAQ
What is Applied Materials' ticker symbol?
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AMAT, listed on Nasdaq. Officially Applied Materials, Inc. Founded 1967, headquartered in Santa Clara, California. The largest semiconductor equipment company in the world by revenue.
Who are AMAT's competitors?
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Lam Research is the primary direct competitor across etch, deposition, and CMP. KLA dominates inspection and metrology (less overlap with AMAT). Tokyo Electron (TEL) is a Japanese competitor across multiple categories. ASML is in lithography (separate market). Together, these are the four largest fab equipment companies.
Is AMAT an AI stock?
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Indirectly yes. Every new AI accelerator chip is manufactured in a fab that uses AMAT equipment. AI-driven semiconductor capex (TSMC, Samsung, Intel, Micron all expanding) drives AMAT's revenue. The exposure is more upstream than NVIDIA but in the same overall trend.
What is AMAT's P/E ratio?
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Approximately 22x trailing twelve months as of early 2026. In line with the S&P 500 average (~22x). Lower than fabless designers (NVIDIA ~50x, AVGO ~45x) because equipment revenue is cyclical, but the structural growth in semiconductor capex supports the multiple.
What does Applied Materials do?
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AMAT manufactures the equipment that semiconductor fabs use to make chips: deposition tools, etch tools, chemical mechanical polishing (CMP), implant, and inspection systems. It also has a service business generating recurring revenue from the installed base, plus emerging businesses in display equipment and advanced packaging.
Who owns the most AMAT stock?
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Major institutional holders include Vanguard (~10%), BlackRock (~8%), and State Street (~4%). Insider ownership is low. AMAT is broadly institutionally owned.
Which ETFs have the most AMAT exposure?
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SMH (VanEck Semiconductor) holds AMAT at ~4.4%. SOXX (iShares Semiconductor) holds AMAT at ~4.9%. QQQ holds AMAT as part of the Nasdaq-100. VGT and XLK include AMAT as part of broader tech. AMAT is a structural beneficiary of semiconductor capex and shows up in every semi-focused ETF at meaningful weight.
Which thematic baskets typically include AMAT?
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Two themes on Walnut. AI infrastructure (every new AI-driven fab requires substantial AMAT tooling) and Semiconductors (the largest equipment company in the world). AI infrastructure baskets often include AMAT as the equipment cornerstone alongside ASML, providing exposure to fab capex without the cyclicality of pure fab operators.
How much of SMH is AMAT?
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Approximately 4.4% as of early 2026. AMAT is typically the sixth or seventh-largest SMH holding, behind NVDA, TSM, AVGO, AMD, and ASML. In SOXX (broader weighting), AMAT is at ~4.9%, slightly higher concentration.
Is AMAT in the S&P 500?
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Yes. AMAT has been an S&P 500 constituent for many years. It is typically a top-50 S&P 500 holding by market cap, supported by consistent earnings and capex cycle exposure.
What is AMAT's market cap?
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Approximately $130 billion as of early 2026. Market cap has grown substantially from semi capex up-cycle and AI-driven fab buildouts. AMAT is the largest equipment company by revenue and market cap, larger than Lam Research, KLA, and Tokyo Electron individually.
Does AMAT pay a dividend?
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Yes. AMAT yields approximately 1.0% as of early 2026, paid quarterly. The dividend has been raised consistently for many years. AMAT also conducts share buybacks. Capital return has been meaningful even during heavy capex investment cycles.
Is the semi capex cycle peaked?
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Walnut isn't an investment adviser. Factually, the current semi capex cycle has been driven by AI infrastructure plus reshoring (CHIPS Act fab buildouts at TSMC Arizona, Intel Ohio, Samsung Texas, Micron New York). Backlog at AMAT, Lam, ASML, and TEL has grown materially through 2024-2025. Whether the cycle has peaked depends on assumptions about hyperscaler AI capex commitment durability.
What's the difference between AMAT and ASML?
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Both make semiconductor equipment, different categories. ASML is the monopoly supplier of EUV lithography (the patterning step). AMAT makes virtually everything else in the fab: deposition, etch, CMP, implant, inspection. The two are complementary rather than competitive; every leading-edge fab buys from both. ASML's monopoly gives it higher pricing power; AMAT's breadth gives it broader revenue exposure.
Should I own AMAT directly or through SMH?
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Both common. Direct AMAT ownership gives concentrated equipment exposure with full capex cycle upside. SMH includes AMAT at ~4.4% along with broader semiconductor exposure. Many Walnut users hold both: direct AMAT for the equipment thesis plus SMH for diversified semi cycle. AMAT's cyclical earnings make through-cycle position sizing important.
Walnut is informational, not investment advice. Financial figures on this page are approximations; always verify current numbers with Applied Materials, Inc.'s investor relations page or your broker before making investment decisions.