Applied Materials' Margin Story Has Been Expanding—While Its Market Share Has Not

Note: These figures reflect diluted GAAP earnings per share, reported before non-recurring items, and may differ from the non-GAAP figures used by some sources.

Part 2.1: Price Behavior Around Earnings

Applied Materials reports after the close, meaning Day 0 reflects anticipation before results are released, while Day +1 captures the market's first full reaction to the actual numbers and guidance.

Applied Materials has shown significant volatility around earnings, with an average absolute Day 0 move of 1.87% and a much larger Day +1 move averaging 6.50%. The Day +1 reaction has been particularly pronounced, with swings ranging from a 14.07% decline in August 2025 to an 8.08% gain in February 2026.

The most recent report in August 2026 saw a modest 2.48% decline on Day 0, followed by a sharper 5.12% drop on Day +1, despite the company beating estimates and posting record revenue. This pattern—where strong results still produce negative reactions—has repeated across several quarters, suggesting investors are highly sensitive to guidance and forward commentary rather than backward-looking beats.

The 6.50% average Day +1 move is notably larger than the 1.87% Day 0 move, which makes sense given that the stock reports after the close. Investors should expect the bulk of the price action to occur in the session following the release, once the market has digested both the results and management's outlook.

Part 2.2: Options Market Expected Move

The options market is pricing an expected move of 6.25% for the November 13 weekly expiration, which is slightly below the stock's 6.50% average Day +1 move over the past eight quarters. This suggests the options market sees this earnings event as roughly in line with recent historical volatility, though the 6.25% figure still represents a significant potential swing and reflects elevated uncertainty heading into the print.

Part 3: What Analysts Are Saying

Applied Materials holds a Strong Buy consensus among analysts, with 26 Strong Buy ratings, 3 Moderate Buy ratings, and 8 Hold ratings. There are no Sell or Strong Sell ratings. The average recommendation score is 4.49 out of 5.0, reflecting broad bullish sentiment.

The mean price target stands at $628.12, implying approximately 59% upside from the current level. Analyst targets range from a low of $452.00 to a high of $900.00, showing a wide dispersion of views on the stock's potential.

Sentiment has deteriorated slightly over the past month, with the number of Strong Buy ratings declining from 27 to 26 and Hold ratings increasing from 7 to 8. The average recommendation score has also ticked down from 4.54 to 4.49, suggesting some analysts have grown more cautious.

Despite the recent moderation in sentiment, the consensus remains decidedly positive. The $628.12 mean target implies analysts believe the recent selloff has created a significant buying opportunity, though the deterioration in sentiment and the wide range of price targets suggest there is meaningful debate about the timing and magnitude of the recovery. The key question is whether management's fiscal 2027 outlook and margin commentary can restore confidence and justify the bullish targets.

Part 4: Technical Picture

The Barchart Technical Opinion currently shows a 72% Sell signal, unchanged from last week but a sharp reversal from the 8% Buy signal seen a month ago. This deterioration reflects the stock's significant decline over the past month and the breakdown in its technical structure.

• Short-term (50% Sell): Moderate sell signal indicates near-term momentum has turned negative, though not at an extreme level
• Medium-term (100% Sell): Strong sell signal across all medium-term indicators reflects sustained weakness in the intermediate timeframe
• Long-term (50% Sell): Moderate sell signal suggests the longer-term trend has also weakened, though less severely than the medium-term picture

Trend Characteristics: The trend is characterized by Average strength and Average direction, suggesting the stock is in a transitional phase rather than a clear directional move. This mixed setup creates uncertainty heading into earnings, as the stock lacks strong momentum in either direction.

From a moving average perspective, the stock is positioned above its shorter-term averages but below its longer-term benchmarks. At the current level, Applied Materials trades above the 5-day, 10-day, and 20-day moving averages, indicating some near-term stabilization. However, it remains below the 50-day, 100-day, and 200-day moving averages, confirming the stock is still in a broader downtrend despite recent stabilization.

The technical setup heading into earnings is cautionary. The stock has formed a "death cross" with the 50-day moving average below the 200-day, and the 20-day moving average is also below the 50-day, creating a bearish crossover structure. While the stock has bounced modestly in recent sessions and sits above its 20-day moving average, it remains more than 10% below both its 50-day and 200-day moving averages, indicating overhead resistance. Bulls would generally want to see the stock close back above the 50-day area to argue the longer downswing is easing. The combination of a strong sell signal, a bearish moving average structure, and the stock's recent 20%+ decline suggests the technical backdrop is fragile, leaving little room for error on the earnings report.