Why Applied Materials (AMAT) Stock Is Getting Hammered

Applied Materials, Inc. AMAT shares are trading lower by 4.75% to $209.22 Wednesday afternoon. Shares of semiconductor stocks are trading lower amid recent earnings in the sector and concerns over potential China restrictions.

What’s Happening?

Shares of several semiconductor stocks are volatile in recent sessions amid reports that President Biden is considering further China restrictions and Donald Trump’s comments on the China-Taiwan standoff during a Bloomberg interview. The sector is also affected by recent earnings.

Trump's remarks on Taiwan's key role in the U.S. chip industry and outsourcing to Taiwan raised concerns about potential political and economic instability. He hinted at a possible U.S. policy shift towards Taiwan, which could disrupt the semiconductor supply chain.

Geopolitical tension fuels investor fears of supply chain disruptions and potential tariffs or sanctions, impacting companies like Applied Materials, which supplies equipment to chip manufacturers.

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Is AMAT A Good Stock To Buy?

When deciding whether to buy a stock, there are some key fundamentals investors may want to consider. One of these factors is revenue growth. Buying a stock is essentially a bet that the business will continue to grow and generate profits in the future.

Applied Materials has reported average annual revenue growth of 15.11% over the past 5 years. .

It's also important to pay attention to valuation when deciding whether to buy a stock. Applied Mat has a forward P/E ratio of 23.2. This means investors are paying $23.2 for each dollar of expected earnings in the future. The average forward P/E ratio of Applied Mat's peers is 31.32.

Other important metrics to look at include a company's profitability, balance sheet, performance relative to a benchmark index and valuation compared to peers. For in-depth analysis tools and important financial data, check out Benzinga PRO.

AMAT has a 52-week high of $255.89 and a 52-week low of $129.21.