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Applied Materials, Inc. (NASDAQ:AMAT) is included among the 15 Dividend Stocks that Outperform the S&P 500.
On December 2, Morgan Stanley raised its price target on Applied Materials, Inc. (NASDAQ:AMAT) to $273 from $252 on the back of strong growth expectations, while maintaining an Overweight rating. The firm kept its 2026 wafer fab equipment (WFE) forecast largely unchanged at $129 billion, reflecting 11% year-over-year growth, and lifted its 2027 WFE projection to $145 billion, up 13% year over year. The analyst highlighted that the company is positioned for “two very strong years of growth,” supported by DRAM demand and TSMC’s investments.
In its Q3 2025 earnings release, Applied Materials, Inc. (NASDAQ:AMAT) noted that AI adoption continues to drive significant investment in advanced semiconductors and wafer fab equipment, marking the company’s sixth consecutive year of fiscal growth. Management emphasized that the company is well positioned at key technology inflection points in the fastest-growing market segments, extending its leadership in leading-edge logic, DRAM, and advanced packaging as next-generation technologies move into volume production in the coming years.
Applied Materials, Inc. (NASDAQ:AMAT) generated nearly $8 billion in cash from operations and $5.7 billion in free cash flow, while capital spending totaled $2.3 billion, primarily for the new EPIC Center. The company also returned $1.4 billion to shareholders through cash dividends. The company has consistently raised dividends for eight consecutive years, and over the past decade through 2024, its dividend per share has grown at a compound annual growth rate of around 15%, with nearly 90% of free cash flow returned to shareholders.
Applied Materials, Inc. (NASDAQ:AMAT) provides the equipment, services, and software required by the semiconductor and display industries to manufacture chips and advanced displays.
While we acknowledge the potential of AMAT as an investment, we believe certain AI stocks offer greater upside potential and carry less downside risk. If you’re looking for an extremely undervalued AI stock that also stands to benefit significantly from Trump-era tariffs and the onshoring trend, see our free report on the best short-term AI stock.
READ NEXT: 15 High Quality Dividend Stocks for Long-Term Investors and 14 Best Up and Coming Dividend Stocks to Buy.
Disclosure: None.
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