This is a step-by-step stock review to answer the question, is Applied Materials (AMAT) stock a good buy?
This article will teach you how to use the 4Ms of investing. This will be a detailed walkthrough to show you how the 4Ms work and why they are important. If you are interested, you can log into Tykr to use the 4M Confidence Booster (Powered by OpenAI) which will allow you to complete a 4M Analysis in less than 60 seconds.
What are the 4Ms?
- MOS (Margin of Safety) – The MOS is the math part of investing which includes the Summary, Score, and MOS (Margin of Safety).
- Meaning – The meaning is the business model and how scalable the revenue streams are.
- Moat – The moat is how the business compares to other companies in the same Sector and Industry.
- Management – The management is the track record of the CEO.
What 4M score are we going for?
- 80-100 = High confidence – Yay! You should have high confidence buying this stock. It passes all 4M!
- 60-79 = Moderate confidence – Alert! There may be better stocks in the market. Only buy this stock if you truly believe the company will improve!
- 0-59 = Low confidence – Warning! There are better stocks in the market. Due to the low score, you should consider looking at other stocks.
Table of Contents
The following links will direct you to key topics to help answer the question, is Applied Materials (AMAT) stock a good buy?
- Applied Materials Company History
- MOS
- Meaning
- Moat
- Management
- 4M Score
- Is Applied Materials (AMAT) stock a good buy?
1.Applied Materials Company History
- Founded in 1967: Applied Materials was established in Santa Clara, California, focusing on equipment for semiconductor manufacturing.
- Early Innovations: The company pioneered advancements in thin-film deposition and ion implantation, critical for semiconductor production.
- Public Listing: Applied Materials went public in 1972, trading on the NASDAQ under the ticker AMAT, becoming a key player in the tech industry.
- Global Expansion: Over the decades, Applied Materials expanded globally, serving major semiconductor and display manufacturers worldwide.
- Diversification: The company diversified its portfolio, adding products and services for advanced displays, solar energy, and other high-tech applications.
- Acquisitions: Key acquisitions include Tokyo Electron (pending completion as of 2024) and Kokusai Electric, strengthening its market position and technological capabilities.
- Innovation Focus: Applied Materials invests heavily in R&D to drive advancements in chip technology, including artificial intelligence, quantum computing, and next-gen semiconductor manufacturing.
2. MOS (Margin Of Safety)
When investing in a company, the first step is to look at the financials. Fortunately, Tykr does this for us automatically. The higher the score, the stronger the financials and the safer the investment. The higher the MOS, the higher the potential returns you can make.
- Summary: Watch
- Score: 67
- MOS: 1%
To see the most up-to-date Summary, Score, and MOS, please log into Tykr.
3. Meaning
When investing in a company, it’s important to know how a company makes money. A mature business model has multiple streams of revenue which allow the company to weather downturns in the economy.
Here is how Applied Materials makes money:
- Semiconductor Equipment Sales: Applied Materials makes money by selling equipment used in semiconductor manufacturing, such as machines for wafer fabrication and inspection.
- Display Technology: The company earns revenue from equipment and technology used in manufacturing flat-panel displays and advanced screen technologies.
- Service and Support: They generate income from providing maintenance, upgrades, and support services for their equipment and technology.
- Advanced Packaging: Revenue comes from sales of equipment used in advanced packaging technologies, which are critical for improving semiconductor performance.
- Software Solutions: Applied Materials also earns money from software products that help optimize the manufacturing processes for semiconductors and displays.
- Tokyo Electron
- Kokusai Electric
- Fabripure
4. Moat
When investing in a company, it’s important to understand how a company ranks against other companies in the same sector and industry. Based on the Score, here is how Applied Materials tacks up against other companies.
- NVIDIA Corporation.(NVDA) – 100
- Nova Ltd.(NVMI) – 78
- Monolithic Power Systems, Inc.(MPWR) – 78
- Tower Semiconductor Ltd.(TSEM) – 72
- Axcelis Technologies, Inc.(ACLS) – 72
- Applied Materials, Inc.(AMAT) – 67
To see the most up-to-date Summary, Score, and MOS and each stock, please log into Tykr.
5. Management
When investing in a company, it’s important to understand who the CEO is, what they have accomplished in the past, and how they have helped this company grow. Good leaders typically have stronger cultures, less turnover, and better returns in the stock market.
- Revenue Growth: Gary E. Dickerson Led Applied Materials to significant increases in revenue, enhancing the company’s financial performance.
- Technological Advancements: Oversaw the development and introduction of innovative technologies in semiconductor manufacturing.
- Market Expansion: Expanded the company’s market presence, entering new regions and sectors.
- Operational Efficiency: Improved operational efficiencies, reducing costs and streamlining processes.
- Strategic Acquisitions: Directed successful acquisitions that strengthened Applied Materials’ technology portfolio and market position.
- Customer Relationships: Enhanced relationships with key customers, driving long-term partnerships and business growth.
- Sustainability Initiatives: Advanced sustainability efforts within the company, promoting environmentally responsible practices.
6. 4M Score
All of our homework on this company leads up to the 4M Score. A lot of investors only look at the numbers. Yes, it’s important to look at the first M (MOS) which is the math part of investing but it’s also important to look past the numbers and also look at the Meaning, Moat, and Management. If all 4Ms pass, we should have high confidence in buying this stock.
What 4M score are we going for?
- 80-100 = High confidence – Yay! You should have high confidence buying this stock. It passes all 4M!
- 60-79 = Moderate confidence – Alert! There may be better stocks in the market. Only buy this stock if you truly believe the company will improve!
- 0-59 = Low confidence – Warning! There are better stocks in the market. Due to the low score, you should consider looking at other stocks.
👉 The 4M Score of Applied Materials (AMAT) is 79/100.
To see the most up-to-date 4M Score, please log into Tykr.
7. Is Applied Materials (AMAT) stock a good buy?
Some of the top questions investors can have is Applied Materials (AMAT) stock a good buy or should I buy Applied Materials (AMAT) stock?
Applied Materials is a promising investment for several key reasons. As a leader in semiconductor and display manufacturing equipment, the company benefits from the growing demand for advanced technology and electronics. Applied Materials’ strong market position and continuous innovation in technology ensure it stays at the forefront of the industry. Its solid financial performance, driven by strategic partnerships and acquisitions, supports long-term growth. Additionally, Applied Materials is well-positioned to capitalize on trends in artificial intelligence and renewable energy, further enhancing its investment appeal. However, investors should be aware of potential market fluctuations and the cyclical nature of the semiconductor industry. Overall, if you’re seeking a tech company with robust growth prospects and a leadership position in its field, Applied Materials is a strong choice.
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To truly know if Applied Materials is a good stock to buy or sell, we recommend you log into Tykr. Within seconds you can see the Summary, Score, MOS, and 4M Score.
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The Summary, Score, and MOS of this stock may have changed since the posting of this review. Please login to Tykr to see up-to-date information.