Key Points
- Despite the technology sector’s recent volatility, some insiders and institutions have been buying into Applied Materials stock lately.
- Wall Street analysts understand the risk-to-reward ratio in this name is fantastic, so they keep a high valuation.
- Bearish traders have started to walk away from their short positions, knowing the upside is too big.
Wall Street carries on the old saying that one man’s trash can become another man’s treasure, and in today’s market, that saying stands as strong as ever. As the S&P 500 index has undergone an extended period of volatility due to the trade tariffs being rolled out by President Trump, the levels of uncertainty hitting the market have shifted many views for investors today, leaning most capital to become risk-averse and let go of some of the names they once held dearly.
This is a time when smart investors start to return to the game, hunting for opportunities and mispricing events that they can then lock in for profits in later months or quarters.
Understanding that opportunities like these abound in today’s volatile market can lead investors to find some of the best setups for themselves. The question now becomes which of these opportunities can be seen as the best one.
By following insider buying activity in the market, investors looking for a good deal would have landed in one of the technology sector’s names, that being Applied Materials Inc. (NASDAQ: AMAT). This is unlikely to attract new capital in these volatile times, especially as it directly deals with the semiconductor and chipmaking industry, which has become the center of most of these new trade tariffs today.
What Looks Good at Applied Materials?
It’s not only the belief that the market will eventually come out of these trade tariffs unscathed, as these things tend to come and go with business cycles, but also the inherent risk-to-reward setup in Applied Materials specifically. As the stock has been dragged down along with the entire market, its shares now trade at a low of 54% of their 52-week high levels.
This discount essentially prices in all of the bad news and worst-case scenarios that most investors have had in mind ever since the first rollout of these tariffs. Now that the absolute worst is already baked into the stock price, it only makes sense that the scale would tilt in favor of the buyers, those brave enough to enter the market during this uncertainty, of course.
And that they did, starting with the company’s insiders themselves. Gary E. Dickerson, Applied Materials’ CEO, bought up to 50,000 shares of the company he runs from top to bottom in a transaction worth as much as $6.8 million. Considering the timing of the reported transaction, which was early April 2025, there can be an assumed level of confidence traveling within the company.
That confidence also spilled over to other participants in the market, those who understand the fact that these short-term uncertainties are nothing but a speedbump to be removed in the coming months, clearing the path for this stock to recover its former highs.
The Market’s Take on Applied Materials Stock
Checking in with these other participants, investors can note that a further $384 million worth of institutional buying took place as of this quarter (which is made up of April thus far). This sentiment shift and willingness to back up a stock that has been the subject of such negativity and bearish price action should not be taken lightly.
Even those who commit to remaining bearish have started to give up the fight, realizing that the juice isn’t worth the squeeze in betting against Applied Materials this time around. Investors can see this sentiment shift at play through the stock’s 13.9% decline in short interest over the past month alone, a clear sign of bearish capitulation.
Then, and just as important, there’s the way Wall Street analysts feel about this stock. The current consensus price target is set at $210.3 per share, which, compared to today’s low prices, would call for an implied upside of as much as 52.1%, crystallizing that risk-to-reward ratio already mentioned.
The fundamental outlook for the company’s financials also supports these views. Wall Street analysts feel confident forecasting up to $2.49 in earnings per share (EPS) for the fourth quarter of 2025, a near 10% jump from today’s reported $2.28 in EPS.
As most investors understand, where EPS growth goes, so does the stock price. Now, investors can walk away with a solid understanding of why insiders decided to start buying Applied Materials and just why these Wall Street analysts are still willing to risk their reputations by backing up a declining stock.
It’s all based on the fundamental belief that, when tariffs inevitably subside, Applied Materials will likely easily fulfill these double-digit upside expectations.
Companies in This Article:
| Company | Current Price | Price Change | Dividend Yield | P/E Ratio | Consensus Rating | Consensus Price Target |
|---|---|---|---|---|---|---|
| Applied Materials (AMAT) | $143.58 | +3.8% | 1.28% | 18.77 | Moderate Buy | $208.86 |
About Gabriel Osorio-Mazilli
Experience
Gabriel Osorio-Mazilli has been a contributing writer for InsiderTrades.com since 2023.
Areas of Expertise
Value investing, long/short trading, options, emerging markets
Education
CFA Level I candidate, CFA Institute; Goldman Sachs corporate training; independent courses
Past Experience
Analyst at Goldman Sachs, associate at Citigroup, senior financial analyst in real estate
