AMAT's Flash Memory Sales Nearly Double in FY25: What's Ahead?

Applied Materials’ AMAT flash memory or NAND sales nearly doubled to $1.41 billion in fiscal 2025 from the year-ago figure of $747.4 million. Although AMAT has a lower market share in the NAND space, it is gaining prominence. The growth in the NAND business came despite the U.S. export controls on the Chinese market.

Applied Materials' NAND or Flash memory business contributed 7% of the fiscal 2025 top line, which grew from 4% in fiscal 2024. The growth in the NAND business was primarily due to a rise in memory customers’ spending for NAND fabrication equipment upgrades. NAND is gaining traction due to increasing applications in cloud computing and building on the existing potential in mobile.

The industry's transition to 3D NAND is helping the company to further expand the available market. In fiscal 2025, AMAT launched the PROVision 10 System and SEMVision eBeam System, with applications in wafer fabrication for the higher-density 3D NAND semiconductor products.

PROVision 10 is an e-beam metrology system designed to help chip manufacturers measure and control increasingly complex 3D semiconductor structures, including 3D NAND. SEMVision H20 uses advanced cold field emission eBeam technology plus AI image recognition for higher resolution, faster imaging, and better defect classification.

AMAT’s Sym3 Magnum etch system is gaining traction because of its capability to develop high-aspect-ratio structures in 3D NAND. These new breakthroughs and the demand from semiconductor manufacturers are likely to support AMAT’s NAND growth.

How Competitors Fare Against AMAT

Lam Research LRCX and KLA Corporation KLAC are two of the most prominent competitors of AMAT in the NAND semiconductor equipment space. In the first quarter of fiscal 2026, KLA Corporation’s Semiconductor Process Control segment revenues constituted 26% of the revenue from its memory-based semiconductor products, in which NAND contributed 21%.

Unlike KLA Corporation, Lam Research’s NAND system revenues decreased sequentially to contribute to 18% of total revenues in the first quarter of fiscal 2026. Lam Research sees an opportunity in the ongoing upgrades made to the existing fabs by its NAND customers to meet the need for higher layer count, higher-performance devices, which is expected to need a spending of $40 billion in wafer fabrication equipment. Lam Research is expected to capitalize on this.

AMAT’s Price Performance, Valuation and Estimates

Shares of Applied Materials have surged 55.9% in the past six months compared with the Electronics - Semiconductors industry’s appreciation of 27.8%.

AMAT Six-Month Performance Chart

From a valuation standpoint, Applied Materials trades at a forward price-to-sales ratio of 8.23X, lower than the industry’s average of 8.63X.

AMAT Forward 12-Month (P/S) Valuation Chart

The Zacks Consensus Estimate for Applied Materials’ fiscal 2026 and 2027 earnings implies year-over-year growth of 1.38% and 18.56%, respectively. The estimates for fiscal 2026 and  2027 have been revised upward in the past 30 days.

Applied Materials currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

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This article originally published on Zacks Investment Research (zacks.com).

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