Applied MaterialsAMAT +0.53%85 Pretax Margin % is 40.77% as of Apr. 2026, which is 47% above its 10-year median of 27.71. GuruFocus rates AMAT with a GF Score™ of 85/100 and a GF Value™ of $217.42 (Significantly Overvalued). The stock has 6 warning signs investors should review. Among 1,023 Semiconductors companies, Applied Materials ranks better than 95.11% on this metric.
The pretax margin, as know as pretax profit margin, is widely used to measure the operating efficiency of a company before deducting taxes.
The pretax margin is sometimes preferred over the net margin as tax expenditures can make profitability comparisons between companies misleading.
It is a useful tool to compare companies operating in the same sector and less effective when comparing companies from other sectors as each industry generally has different operating expenses and sales patterns.
The long term trend of the pretax margin is a good indicator of the competitiveness and health of the business.
Applied Materials Pretax Margin % Related Terms
Applied Materials Pretax Margin % Historical Data
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The historical data trend for Applied Materials's Pretax 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.
AMAT vs LRCX, KLAC, TER: Pretax Margin % Comparison
For the Semiconductor Equipment & Materials subindustry, Applied Materials's Pretax Margin %, along with its competitors' market caps and Pretax 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 Pretax Margin % vs Semiconductors Industry
For the Semiconductors industry and Technology sector, Applied Materials's Pretax Margin % distribution charts can be found below:
* The bar in red indicates where Applied Materials's Pretax 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.
Applied Materials (AMAT) has a Pretax Margin % of 40.77% as of Apr. 2026. Pre-Tax margin is the ratio of total pre-tax income to net sales. View historical data on Applied Materials and its competitors. This is 47% above median its historical median of 27.71. Over the past decade, Applied Materials' Pretax Margin % has ranged from 18.60 to 35.77. According to the industry distribution chart, Applied Materials ranks #50 out of 1023 companies in the Semiconductors industry, placing it in the top 4.9%.
Is Applied Materials' Pretax Margin % too high?
Applied Materials' current Pretax Margin % of 40.77% is 47% above median its 10-year median of 27.71. Over the past 10 years, this metric has ranged from a low of 18.60 to a high of 35.77. The Semiconductors industry median Pretax Margin % is 5.07. Applied Materials' value of 40.77% is 704.1% above this industry median. Based on the distribution chart, Applied Materials ranks #50 out of 1023 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' Pretax Margin % compare to LRCX and KLAC?
According to the Semiconductors industry distribution chart, Applied Materials ranks #50 out of 1023 companies for Pretax Margin %. This places Applied Materials in the top 5% of its industry — outperforming the majority of peers. The industry median Pretax Margin % is 5.07. Applied Materials' value of 40.77% is 704.1% above this benchmark. Historically, Applied Materials' own Pretax Margin % has ranged from 18.60 to 35.77 over the past decade. While the company's 10-year median is 27.71 vs. the industry median of 5.07, 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 Pretax Margin % for a Semiconductors company?
The median Pretax Margin % among Semiconductors companies is 5.07, based on 1,023 companies in the industry. Companies in the top quartile (top 25%) have a Pretax Margin % significantly above this median, while those in the bottom quartile fall well below. However, Pretax Margin % should not be evaluated in isolation — investors should consider it alongside profitability, growth, and financial strength metrics. Applied Materials's current Pretax Margin % of 40.77% is 704.1% 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 Pretax Margin % mean?
A high Pretax Margin % can signal that a stock is expensive relative to its fundamentals. Pre-Tax margin is the ratio of total pre-tax income to net sales. View historical data on Applied Materials and its competitors. For the Semiconductors industry, the median Pretax Margin % is 5.07 — values significantly above this may indicate overvaluation, while values below may suggest a bargain or underlying issues. Applied Materials's current Pretax Margin % is 40.77%, which is 47% above median its own 10-year median of 27.71. 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 (AMAT) is currently considered Significantly Overvalued. The stock's GF Value™ is $217.42, compared to a current price of $588.97 — trading 170.9% above its estimated fair value. The current Pretax Margin % is 40.77%, which is 47% above median its 10-year median of 27.71 and 704.1% above the Semiconductors industry median of 5.07. 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 Pretax Margin % calculated?
Pretax Margin % is calculated from a company's financial statements. For Applied Materials (AMAT), the current Pretax Margin % is 40.77% 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 (AMAT) Overvalued in 2026?
Based on GuruFocus' analysis, Applied Materials stock appears to be overvalued.
The current stock price of $588.97 is trading 170.9% above its estimated GF Value™ of $217.42.
GuruFocus considers Applied Materials to be Significantly Overvalued.
Key valuation signals for AMAT:
Pretax Margin %: 40.77% (47% above median its 10-year median of 27.71)
GF Value™: $217.42 vs. price of $588.97 (170.9% above fair value)
Industry Position: 704.1% above the Semiconductors median (#50 of 1023)
No single metric tells the full story. See the AMAT 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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