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Investing.com - KeyBanc raised its price target on Applied Materials (NASDAQ:AMAT) to $220 from $200 while maintaining an Overweight rating on Tuesday. The semiconductor equipment giant, currently trading at $200.52, has shown remarkable momentum with a 15.55% gain in the past week alone. According to InvestingPro data, the stock’s RSI indicates overbought territory, suggesting careful entry point consideration.
The investment firm cited several factors affecting Applied Materials’ stock performance, noting that shares have lagged behind industry peers year-to-date. Despite this relative underperformance, InvestingPro analysis shows the company maintains a "GREAT" financial health score of 3.13, with strong profitability metrics. KeyBanc attributed the earlier underperformance to concerns over mature node demand headwinds, particularly in China, which represents the largest share of Applied Materials’ equipment sales.
KeyBanc also pointed out that Applied Materials had previously indicated lumpiness in leading-edge demand was creating elevated uncertainty and lower visibility for the second half of the calendar year. This announcement during earnings season was viewed negatively by investors and contributed to the company’s currently discounted valuation.
Despite these challenges, KeyBanc believes Applied Materials faces similar leading-edge catalysts as other companies in the semiconductor equipment sector. The firm noted that investor sentiment remains relatively muted due to more challenged trailing-edge exposure in China.
KeyBanc concluded that the China-related challenges are "generally well known" and are part of the reason for Applied Materials’ "more reasonable valuation" compared to industry peers. With a market capitalization of $159.74B and a P/E ratio of 23.93, the stock is currently trading near its InvestingPro Fair Value. Investors seeking deeper insights can access 18 additional ProTips and comprehensive valuation metrics through InvestingPro’s detailed research report.
In other recent news, Applied Materials announced a quarterly cash dividend of $0.46 per share, payable on December 11, 2025, to shareholders of record as of November 20, 2025. This marks the continuation of its dividend growth strategy, having increased its dividend for eight consecutive years. Meanwhile, Mizuho downgraded Applied Materials from Outperform to Neutral, citing market share concerns in key product segments that contribute significantly to the company’s revenue. In contrast, Cantor Fitzgerald maintained its Overweight rating, keeping a positive outlook and a price target of $200.00 despite recent market challenges. Similarly, TD Cowen reiterated its Buy rating with a $200.00 price target, noting industry concerns about China wafer fabrication equipment and potential softness in leading-edge foundry/logic. However, Daiwa Securities downgraded the stock to Neutral due to weaker-than-expected quarterly results and declining semiconductor equipment spending. The downgrade was attributed to issues with major customers like Intel and Samsung and sluggish demand outside AI applications. These developments highlight varied analyst perspectives amid evolving market conditions for Applied Materials.
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