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Signal Ledger valuation · AMAT

Applied Materials Inc

What the shares are worth today on our research (management’s own targets for each business): every line valued at the end of FY2030, net debt rolled forward, then discounted back to Jul 26, 2026.

Signal Ledger valuation$329.23−12% vs $375.58
Business value at FY2030
$323B
FY2030 revenue
$61B
FY2030 EPS · P/E
$28.61 · 16×
Discount rate (WACC · equity)
9.75% · 9.87%

Researched Oct 23, 2026 from SEC filing 0001628280-26-058235 · price $375.58 at research time · Valuation methodology

What each business is worth

BusinessModelFY2030 revenueValue todayPer share2030 multipleValue from beyond FY2030
Semiconductor SystemsMargin$47B$237B$298.8112.9× EBIT65%
Applied Global ServicesMargin$12B$52B$65.1117.0× EBIT65%
Other including Display and new platformsMargin$2B$0.9B$1.1715.4× EBIT67%
Company costsHead-office costs no segment carries, valued as one negative businessCost line—−$31B−$39.25—64%
All businesses$61B$259B$325.84

From 2030 back to today

  1. Enterprise value at end of FY2030$323B
  2. Plus net cash at FY2030$51B
  3. Equity value at FY2030$374B
  4. ÷ (1 + 9.87%)^4.3 years at the cost of equity$250B
  5. + dividends paid on the way, discounted$5.5B

This reconciliation checks the published Signal Ledger valuation against the net-debt path. The difference is 2.1%, inside our 5% tolerance.

From businesses to one share

  1. All businesses, valued today$259B
  2. − borrowings$6.5B
  3. − finance leases$0B
  4. + cash and short-term investments$9.2B
  5. ÷ diluted shares0.794B
  6. Signal Ledger valuation$329.23

Year by year to FY2030

Fiscal yearRevenueEBITDACapexFree cash flowNet debt at year end
FY2026$34B$10B$2.8B$6.3B$4B cash
FY2027$41B$14B$3.4B$8.5B$11B cash
FY2028$47B$17B$4B$11B$21B cash
FY2029$54B$21B$4.5B$14B$34B cash
FY2030$61B$25B$5.1B$17B$51B cash

What must be true

  • Semiconductor Systems grows revenue from $26.0B in FY2026 to $47.3B in FY2030 (1.8×).
  • Applied Global Services grows revenue from $6.8B in FY2026 to $11.7B in FY2030 (1.7×).
  • Other including Display and new platforms grows revenue from $1.4B in FY2026 to $2.0B in FY2030 (1.4×).
  • Semiconductor Systems raises its EBIT margin from 35.5% to 48.3%.
  • Applied Global Services raises its EBIT margin from 28.1% to 32.1%.
  • Other including Display and new platforms raises its EBIT margin from 0.0% to 4.0%.
  • The company spends $19.7B of capital expenditure through FY2030.
  • The company stays net cash throughout (lowest point $2.7B of net cash in FY2025).

What the price implies

To reach $375.58 at our discount rate, Applied Materials Inc would need about $70.2B of FY2030 sales (growth of about 19.6% a year from FY2026) with 43.8% GAAP EBIT margin — versus $61B and 43.8% GAAP EBIT margin in our research.

At the research price of $375.58 (2026-10-23), the price asks more than our assumptions overall. These are operating requirements at that price, not additional valuations or forecasts.

If sales and margins changed together

Each row matches the same research price at our unchanged discount rate, by scaling every operating line's margin by one common factor. Sales cover margin and capacity lines only; other valuation lines stay fixed. Margins are revenue-weighted within each metric, before separately modeled corporate costs and eliminations. The conclusion uses the row at our research margins when sales alone can match the price, otherwise the solved row needing the least sales growth; this is a trade-off between growth and profitability, not a forecast.

FY2030 sales factorFY2030 salesFY2026–30 CAGRRequired FY2030 marginRequirement
1.15×At research margins$70.2B19.6%
43.8% GAAP EBIT
Within margin guardrails
1.50×$91.5B27.8%
36.6% GAAP EBIT
Within margin guardrails
2.00×$121.9B37.3%
30.6% GAAP EBIT
Within margin guardrails
3.00×$182.9B52.0%
24.4% GAAP EBIT
Within margin guardrails

CAGR uses $34.3B of same-scope FY2026 sales from the published model or its sourced research base, over four fiscal years. “Within margin guardrails” checks numeric limits only, not commercial plausibility. Each line and year must stay at or below 50.0% GAAP EBIT and 100% EBITDA, or our research margin where that is higher; capacity EBIT uses the engine's equipment depreciation. Unsolved margins are not extrapolated.

Implied discount rate
9.0%

The WACC that makes model value equal the price, shifting WACC and cost of equity by the same amount. Model: 9.8% WACC · 9.9% cost of equity.

All-business FY2030 sales factor
1.15×

FY2030 revenue would need to reach $70.2B (model: $61B) across the margin and capacity businesses. FY1 stays fixed; the sales change ramps to FY2030 and stays at that factor thereafter.

If only one business changed

Businesses with margin or capacity revenue paths, ordered by value today. Revenue and margin are separate alternatives; these requirements are not added together.

Semiconductor Systems

Revenue alone
FY2030 revenue would need to reach $55.5B (model: $47.3B).
Margin alone

FY2030 EBIT margin would need to reach 54.2% (model: 48.3%).

Applied Global Services

Revenue alone
FY2030 revenue would need to reach $21.3B (model: $11.7B).
Margin alone

FY2030 EBIT margin would need to reach 54.9% (model: 32.1%).

Other including Display and new platforms

Revenue alone
This business alone cannot get there within the search range.
Margin alone
This business alone cannot get there within the search range.

Mechanical requirements, not forecasts. The separate sales-only and single-business factors are searched from 0.1× to 6×; an unsolved comparison means this business alone cannot get there within those bounds. Single-business revenue changes apply from FY2 onward; margin changes scale the full EBIT or EBITDA margin path. Mixed groups show revenue-weighted EBIT and EBITDA margins separately. Requirements above 100% are not feasible margins. Joint rows instead search non-negative uniform margin factors only up to the EBIT/EBITDA guardrails; the entire margin path scales, including post-FY2030 convergence. Sales and margins change together only in that table. The rate search runs from the largest terminal growth rate plus 0.5 percentage points to 30% WACC.

The discount rate

Cost of equity
9.87%

r_f 3.87% (5-year average 10-year Treasury yield 3.87% (spot 5.13% on 2026-10-21)) + β 1.20 after Blume adjustment × 5%, rounded to 0.01% (1bp)

WACC
9.75%

methodology §4.5: market-weighted WACC, not rounded

10-year Treasury · model / spot
3.87% · 5.13%

The model uses the recorded 5-year average Treasury yield. The spot yield is shown for context.

Every input, with its source

Show 25 inputs · reported, guidance and rule-based
InputValueBasisWhy
Revenue FY2026Semiconductor Systems$26.0BRulefade high growth (methodology §4.2), growth 25.2% sec.gov ↗ · ir.appliedmaterials.com ↗
Revenue FY2030Semiconductor Systems$47.3BRulefade high growth (methodology §4.2), growth 12.1% sec.gov ↗ · ir.appliedmaterials.com ↗
EBIT margin FY2030Semiconductor Systems48.3%Guidancelinear path to 48.3% by FY2030 (management target) investor.appliedmaterials.com ↗
Maintenance capexSemiconductor Systems10.1%RuleAllocate FY2025 total to manufacturing/EPIC-heavy Semiconductor Systems after service/Other default 2% of each revenue: ($2.260B total capex - 2% * ($6.385B+$1.185B)) / $20.798B. Segment allocations reconcile to total and retain all expansion spending. sec.gov ↗
Terminal growthSemiconductor Systems3.0%Rulemethodology §4.2 terminal growth for a growth line Valuation methodology §4.2 · Read methodology ↗
Revenue FY2026Applied Global Services$6.8BRuletarget (methodology §4.2), growth 7.2% investor.appliedmaterials.com ↗
Revenue FY2030Applied Global Services$11.7BGuidancetarget (methodology §4.2), growth 14.4% investor.appliedmaterials.com ↗
EBIT margin FY2030Applied Global Services32.1%Rulelinear path to 32.1% by FY2030 (§4.3 E2: 4.0000 points = 4pp × clamp((CAGR − 1.5%) / 2%, 0, 1); revenue CAGR 12.9% to FY2030; no cited expansion evidence) investor.appliedmaterials.com ↗
Maintenance capexApplied Global Services2.0%RuleNo separate segment maintenance capex/D&A disclosed: methodology rule 9 default 2%. Manufacturing/EPIC expansion allocated to Semiconductor Systems rather than spreading its capex equally over service and Other revenue. sec.gov ↗
Terminal growthApplied Global Services3.0%Rulemethodology §4.2 terminal growth for a growth line Valuation methodology §4.2 · Read methodology ↗
Revenue FY2026Other including Display and new platforms$1.4BRuletarget (methodology §4.2), growth 17.8% stockanalysis.com ↗
Revenue FY2030Other including Display and new platforms$2.0BGuidancetarget (methodology §4.2), growth 8.8% stockanalysis.com ↗
EBIT margin FY2030Other including Display and new platforms4.0%Rulelinear path to 4.0% by FY2030 (§4.3 E2: 4.0000 points = 4pp × clamp((CAGR − 1.5%) / 2%, 0, 1); revenue CAGR 10.5% to FY2030; no cited expansion evidence) investor.appliedmaterials.com ↗
Maintenance capexOther including Display and new platforms2.0%RuleNo separate segment maintenance capex/D&A disclosed: methodology rule 9 default 2%. Manufacturing/EPIC expansion allocated to Semiconductor Systems rather than spreading its capex equally over service and Other revenue. sec.gov ↗
Terminal growthOther including Display and new platforms3.0%Rulemethodology §4.2 terminal growth for a growth line Valuation methodology §4.2 · Read methodology ↗
Share of revenue FY2026Company costs3.8%Reportedtrailing four quarters: consolidated operating income minus segment profit = −$1.074B; grows with the lines' revenue SEC XBRL 2026-07-26, 2026-04-26, 2026-01-25, 2025-10-26
Share of revenue FY2034Company costs3.8%Reportedtrailing four quarters: consolidated operating income minus segment profit = −$1.074B; grows with the lines' revenue SEC XBRL 2026-07-26, 2026-04-26, 2026-01-25, 2025-10-26
WACCDiscount rates9.75%Rulemethodology §4.5: market-weighted WACC, not rounded FRED DGS10 2021-10-20..2026-10-21
Cost of equityDiscount rates9.87%Ruler_f 3.87% (5-year average 10-year Treasury yield 3.87% (spot 5.13% on 2026-10-21)) + β 1.20 after Blume adjustment × 5%, rounded to 0.01% (1bp) 60 monthly returns vs SPY, 2021-09..2026-09 (adjusted closes)
Tax rateDiscount rates13.0%GuidanceManagement expects ~11% Q4 FY2026 and ~13% in 2027 as global minimum tax takes effect; use forward 13% normalized rate. ir.appliedmaterials.com ↗
Cash and short-term investmentsBalance sheet$9.2BReportedcash, cash equivalents and short-term investments; use consolidated short-term investment total once, including all security classes sec.gov ↗
BorrowingsBalance sheet$6.5BReportedborrowings due within a year plus long-term borrowings sec.gov ↗
Finance leasesBalance sheet$0.0BReportedno finance lease liability reported balance sheet 2026-07-26
SharesBalance sheet0.794BReportedshares outstanding as of 2026-07-26 cover page of 10-Q 0001628280-26-058235
Dividends per yearShareholders$1.6BReportedLast four quarterly payments: $0.46 twice and $0.53 twice = $1.98; verify against dividend announcements. No future payout growth. × 0.794B shares ir.appliedmaterials.com ↗

Research notes

  • share-count comparison: 0.8B quarter 2026-04-27..2026-07-26 · 0001628280-26-058235; point-in-time denominator retained
  • unallocated company costs: $1.1B a year (3.5% of trailing revenue), growing with the lines, valued as one negative business
  • cost of equity 9.87% (β 1.20 after Blume adjustment), WACC 9.8%

Signal Ledger research under one stated scenario — management's targets are delivered — not a forecast that they will be and not investment advice. The research desk (GPT-6.1 (Codex)) gathers filings, guidance and targets; deterministic code applies the samepublished rules to every company and checks the result. Inputs may contain errors; follow the source links before relying on them. Read our valuation methodology →