As of October 29, 2025, Applied Materials Inc has a Discounted Cash Flow (DCF) derived fair value of $219.64 per share. With the current market price at $227.64, this represents a potential upside of -3.5%.
| Key Metrics | Value |
|---|---|
| DCF Fair Value (5-year) | $179.80 |
| DCF Fair Value (10-year) | $219.64 |
| Potential Upside (5-year) | -21.0% |
| Potential Upside (10-year) | -3.5% |
| Discount Rate (WACC) | 9.4% - 12.8% |
Revenue is projected to grow from $27176 million in 10-2024 to $54431 million by 10-2034, representing a compound annual growth rate of approximately 7.2%.
| Fiscal Year | Revenue (USD millions) | Growth |
|---|---|---|
| 10-2024 | 27176 | 2% |
| 10-2025 | 29095 | 7% |
| 10-2026 | 31792 | 9% |
| 10-2027 | 34075 | 7% |
| 10-2028 | 36611 | 7% |
| 10-2029 | 40113 | 10% |
| 10-2030 | 42213 | 5% |
| 10-2031 | 45515 | 8% |
| 10-2032 | 49370 | 8% |
| 10-2033 | 51839 | 5% |
| 10-2034 | 54431 | 5% |
Net profit margin is expected to improve from 26% in 10-2024 to 38% by 10-2034, driven by operational efficiency and economies of scale.
| Fiscal Year | Net Profit (USD millions) | Profit Margin |
|---|---|---|
| 10-2024 | 7177 | 26% |
| 10-2025 | 8254 | 28% |
| 10-2026 | 9709 | 31% |
| 10-2027 | 11109 | 33% |
| 10-2028 | 12653 | 35% |
| 10-2029 | 14610 | 36% |
| 10-2030 | 15524 | 37% |
| 10-2031 | 16897 | 37% |
| 10-2032 | 18500 | 37% |
| 10-2033 | 19603 | 38% |
| 10-2034 | 20768 | 38% |
with a 5-year average of $835 million. Projected CapEx is expected to maintain at approximately 3% of revenue.
Depreciation is based on an average useful life of 5 years for capital assets.
| Fiscal Year | D&A (USD millions) |
|---|---|
| 10-2025 | 947 |
| 10-2026 | 1029 |
| 10-2027 | 1103 |
| 10-2028 | 1130 |
| 10-2029 | 1164 |
| 10-2030 | 1253 |
Net working capital is expected to increase gradually, with projected changes affecting free cash flow.
| Components | Average Days |
|---|---|
| Days Receivables | 79 |
| Days Inventory | 148 |
| Days Payables | 42 |
| Fiscal Year | EBITDA | Tax | CapEx | Change in NWC | FCF |
|---|---|---|---|---|---|
| 3M/2025 | 2534 | 309 | 247 | 293 | 1684 |
| 2026 | 11861 | 1456 | 1078 | 415 | 8912 |
| 2027 | 13521 | 1666 | 1155 | 518 | 10181 |
| 2028 | 15297 | 1897 | 1241 | 767 | 11391 |
| 2029 | 17544 | 2191 | 1360 | 830 | 13163 |
| Valuation Method | Fair Price (USD) | Potential Upside |
|---|---|---|
| 5-Year DCF (Growth) | 179.80 | -21.0% |
| 10-Year DCF (Growth) | 219.64 | -3.5% |
| 5-Year DCF (EBITDA) | 269.47 | 18.4% |
| 10-Year DCF (EBITDA) | 298.27 | 31.0% |
Is Applied Materials Inc (AMAT) a buy or a sell? Applied Materials Inc is definitely a sell. Based on our DCF analysis, Applied Materials Inc (AMAT) appears to be fairly valued with upside potential of -3.5%. The company's strong projected growth in revenue and profitability, coupled with consistent capital expenditure, supports our positive outlook on its intrinsic value.
Key investment drivers include:
Investors should consider a hold at the current market price of $227.64.