Applied MaterialsHAM:AP2 +8.72%85 Gross Margin % is 49.90% as of Apr. 2026, which is 9% above its 10-year median of 45.76. GuruFocus rates HAM:AP2 with a GF Score™ of 85/100 and a GF Value™ of €180.04 (Significantly Overvalued). The stock has 6 warning signs investors should review. Among 1,011 Semiconductors companies, Applied Materials ranks better than 82% on this metric.
Warren Buffett believes that firms with excellent long term economics tend to have consistently higher margins.
Durable competitive advantage creates a high Gross Margin % because of the freedom to price in excess of cost. Companies can be categorized by their Gross Margin %
1. Greater than 40% = Durable competitive advantage
2. Less than 40% = Competition eroding margins
3. Less than 20% = no sustainable competitive advantage
Consistency of Gross Margin is key
Applied Materials had a gross margin of 49.90% for the quarter that ended in Apr. 2026 => Durable competitive advantage
Be Aware
If a company loses its competitive advantages, usually its gross margin declines well before its sales declines. Watching Gross Margin % and Operating Margin % closely helps avoid value trap situations.
Applied Materials Gross Margin % Related Terms
Applied Materials Gross Margin % Historical Data
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The historical data trend for Applied Materials's Gross Margin % can be seen below:
* For Operating Data section: All numbers are indicated by the unit behind each term and all currency related amount are in USD. * For other sections: All numbers are in millions except for per share data, ratio, and percentage. All currency related amount are indicated in the company's associated stock exchange currency.
HAM:AP2 vs LRCX, KLAC, TER: Gross Margin % Comparison
For the Semiconductor Equipment & Materials subindustry, Applied Materials's Gross Margin %, along with its competitors' market caps and Gross Margin % data, can be viewed below:
* Competitive companies are chosen from companies within the same industry, with headquarter located in same country, with closest market capitalization; x-axis shows the market cap, and y-axis shows the term value; the bigger the dot, the larger the market cap. Note that "N/A" values will not show up in the chart.
Applied Materials Gross Margin % vs Semiconductors Industry
For the Semiconductors industry and Technology sector, Applied Materials's Gross Margin % distribution charts can be found below:
* The bar in red indicates where Applied Materials's Gross Margin % falls into.
* For Operating Data section: All numbers are indicated by the unit behind each term and all currency related amount are in USD. * For other sections: All numbers are in millions except for per share data, ratio, and percentage. All currency related amount are indicated in the company's associated stock exchange currency.
A positive Gross Profit is only the first step for a company to make a net profit. The gross profit needs to be big enough to also cover related labor, equipment, rental, marketing/advertising, research and development and a lot of other costs in selling the products.
Applied Materials (HAM:AP2) has a Gross Margin % of 49.90% as of Apr. 2026. Gross margin is the ratio of total gross profit to net sales. View historical data on Applied Materials and its competitors. This is near median its historical median of 45.76. Over the past decade, Applied Materials' Gross Margin % has ranged from 41.67 to 48.96. According to the industry distribution chart, Applied Materials ranks #182 out of 1011 companies in the Semiconductors industry, placing it in the top 18%.
Is Applied Materials' Gross Margin % too high?
Applied Materials' current Gross Margin % of 49.90% is near median its 10-year median of 45.76. Over the past 10 years, this metric has ranged from a low of 41.67 to a high of 48.96. The Semiconductors industry median Gross Margin % is 29.61. Applied Materials' value of 49.90% is 68.5% above this industry median. Based on the distribution chart, Applied Materials ranks #182 out of 1011 companies in the Semiconductors industry, which is in the top quartile — a strong position relative to peers. Overall, Applied Materials has a GF Score™ of 85/100 and is considered Significantly Overvalued, reflecting its overall financial health beyond just this single metric.
How does Applied Materials' Gross Margin % compare to LRCX and KLAC?
According to the Semiconductors industry distribution chart, Applied Materials ranks #182 out of 1011 companies for Gross Margin %. This places Applied Materials in the top 18% of its industry — outperforming the majority of peers. The industry median Gross Margin % is 29.61. Applied Materials' value of 49.90% is 68.5% above this benchmark. Historically, Applied Materials' own Gross Margin % has ranged from 41.67 to 48.96 over the past decade. While the company's 10-year median is 45.76 vs. the industry median of 29.61, Applied Materials has consistently been above the industry average. See the competitive comparison table and distribution chart on this page for a detailed peer-by-peer breakdown.
What is a good Gross Margin % for a Semiconductors company?
The median Gross Margin % among Semiconductors companies is 29.61, based on 1,011 companies in the industry. Companies in the top quartile (top 25%) have a Gross Margin % significantly above this median, while those in the bottom quartile fall well below. However, Gross Margin % should not be evaluated in isolation — investors should consider it alongside profitability, growth, and financial strength metrics. Applied Materials's current Gross Margin % of 49.90% is 68.5% above the industry median. Use the industry distribution chart on this page to see where any company falls relative to its peers.
What does a high Gross Margin % mean?
A high Gross Margin % can signal that a stock is expensive relative to its fundamentals. Gross margin is the ratio of total gross profit to net sales. View historical data on Applied Materials and its competitors. For the Semiconductors industry, the median Gross Margin % is 29.61 — values significantly above this may indicate overvaluation, while values below may suggest a bargain or underlying issues. Applied Materials's current Gross Margin % is 49.90%, which is near median its own 10-year median of 45.76. However, context matters — high-growth companies often justify higher valuations. Always evaluate alongside other metrics like GF Score™ and GF Value™.
Is Applied Materials stock overvalued right now?
Based on GuruFocus' analysis, Applied Materials (HAM:AP2) is currently considered Significantly Overvalued. The stock's GF Value™ is €180.04, compared to a current price of €552.30 — trading 206.8% above its estimated fair value. The current Gross Margin % is 49.90%, which is near median its 10-year median of 45.76 and 68.5% above the Semiconductors industry median of 29.61. Applied Materials' overall GF Score™ is 85/100 with 6 warning signs to review. Investors should evaluate multiple metrics — including profitability, growth, and financial strength — before making a decision.
How is Gross Margin % calculated?
Gross Margin % is calculated from a company's financial statements. For Applied Materials (HAM:AP2), the current Gross Margin % is 49.90% as of Apr. 2026. GuruFocus calculates this using data sourced from SEC filings and annual reports. See the calculation section and 30-year financial data on this page for the full breakdown.
Is Applied Materials (HAM:AP2) Overvalued in 2026?
Based on GuruFocus' analysis, Applied Materials stock appears to be overvalued.
The current stock price of €552.30 is trading 206.8% above its estimated GF Value™ of €180.04.
GuruFocus considers Applied Materials to be Significantly Overvalued.
Key valuation signals for HAM:AP2:
Gross Margin %: 49.90% (near median its 10-year median of 45.76)
GF Value™: €180.04 vs. price of €552.30 (206.8% above fair value)
Industry Position: 68.5% above the Semiconductors median (#182 of 1011)
No single metric tells the full story. See the HAM:AP2 stock analysis page for a complete view including 30-year financials, guru trades, and insider activity.
Applied Materials is the largest semiconductor wafer fabrication equipment manufacturer in the world. It has a broad portfolio spanning nearly every corner of the WFE ecosystem. Applied Materials holds leading market share in deposition, which entails the layering of new materials on semiconductor wafers. It is more exposed to general-purpose logic chips made at integrated device manufacturers and foundries. It counts the largest chipmakers in the world as customers, including TSMC, Intel, and Samsung.
85GF Score
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