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Dr. Charlie Tian is the founder and CEO of GuruFocus.com, a leading global investment research platform established in 2004. With a Ph.D. in physics, Dr. Tian transitioned from science to finance, applying a data-driven, disciplined approach to value investing.
GuruFocus Financial Strength Rank measures how strong a company's financial situation is. It is rated on a scale of 1 to 10 and is based on these factors:
1. The debt burden that the company has as measured by its Interest Coverage (current year). The higher, the better.
2. Debt to revenue ratio. The lower, the better.
3. Altman Z-Score.
4. Other debt related ratios.
A higher score indicates a stronger financial position, with companies rated 7 or above considered financially stable and unlikely to face distress. Conversely, a score of 3 or below suggests potential financial difficulties, indicating a higher risk of distress.
Applied Materials's Interest Coverage for the quarter that ended in Apr. 2026 was 36.57.
Applied Materials's debt to revenue ratio for the quarter that ended in Apr. 2026 was 0.23.
As of today, Applied Materials's Altman Z-Score is 20.17.
The rank is rated on a scale of 1 to 10. A higher score indicates a stronger financial position, with companies rated 7 or above considered financially stable and unlikely to face distress. Conversely, a score of 3 or below suggests potential financial difficulties, indicating a higher risk of distress.
Applied Materials has the Financial Strength Rank of 9. It shows strong financial strength and is unlikely to fall into distressed situations.
Applied Materials Financial Strength Related Terms
XSWX:AMAT vs LRCX, KLAC, TER: Financial Strength Comparison
For the Semiconductor Equipment & Materials subindustry, Applied Materials's Financial Strength, along with its competitors' market caps and Financial Strength 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 Financial Strength vs Semiconductors Industry
For the Semiconductors industry and Technology sector, Applied Materials's Financial Strength distribution charts can be found below:
* The bar in red indicates where Applied Materials's Financial Strength falls into.
Interest Coverage is a ratio that determines how easily a company can pay interest expenses on outstanding debt. It is calculated by dividing a company's Operating Income (EBIT) by its Interest Expense:
Z-Score model is an accurate forecaster of failure up to two years prior to distress. It can be considered the assessment of the distress of industrial corporations.
The zones of discrimination were as such:
When Z-Score is less than 1.81, it is in Distress Zones.
When Z-Score is greater than 2.99, it is in Safe Zones.
When Z-Score is between 1.81 and 2.99, it is in Grey Zones.
Applied Materials has a Z-score of 20.17, indicating it is in Safe Zones. This implies the Z-Score is strong.
Good Sign:
Altman Z-score of 20.17 is strong.
* 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 (XSWX:AMAT) has a Financial Strength of 9 as of Apr. 2026. The financial strength rank measures the strength of a company's balance sheet based on revenue and debt. View historical data on Applied Materials and its competitors. This is 13% above median its historical median of 8.00. Over the past decade, Applied Materials' Financial Strength has ranged from 7.00 to 9.00.
Is Applied Materials' Financial Strength too high?
Applied Materials' current Financial Strength of 9 is 13% above median its 10-year median of 8.00. Over the past 10 years, this metric has ranged from a low of 7.00 to a high of 9.00. Overall, Applied Materials has a GF Score™ of 80/100 and is considered Significantly Overvalued, reflecting its overall financial health beyond just this single metric.
How does Applied Materials' Financial Strength compare to LRCX and KLAC?
Applied Materials' Financial Strength of 9 can be compared against companies in the Semiconductors industry. Historically, Applied Materials' own Financial Strength has ranged from 7.00 to 9.00 over the past decade. See the competitive comparison table and distribution chart on this page for a detailed peer-by-peer breakdown.
What is a good Financial Strength for a Semiconductors company?
A good Financial Strength depends on the Semiconductors industry context. However, Financial Strength should not be evaluated in isolation — investors should consider it alongside profitability, growth, and financial strength metrics. Use the industry distribution chart on this page to see where any company falls relative to its peers.
What does a high Financial Strength mean?
A high Financial Strength can signal that a stock is expensive relative to its fundamentals. The financial strength rank measures the strength of a company's balance sheet based on revenue and debt. View historical data on Applied Materials and its competitors. Applied Materials's current Financial Strength is 9, which is 13% above median its own 10-year median of 8.00. 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 (XSWX:AMAT) is currently considered Significantly Overvalued. The stock's GF Value™ is CHF184.08, compared to a current price of CHF458.35 — trading 149% above its estimated fair value. The current Financial Strength is 9, which is 13% above median its 10-year median of 8.00. Applied Materials' overall GF Score™ is 80/100 with 1 warning sign to review. Investors should evaluate multiple metrics — including profitability, growth, and financial strength — before making a decision.
How is Financial Strength calculated?
Financial Strength is calculated from a company's financial statements. For Applied Materials (XSWX:AMAT), the current Financial Strength is 9 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 (XSWX:AMAT) Overvalued in 2026?
Based on GuruFocus' analysis, Applied Materials stock appears to be overvalued.
The current stock price of CHF458.35 is trading 149% above its estimated GF Value™ of CHF184.08.
GuruFocus considers Applied Materials to be Significantly Overvalued.
Key valuation signals for XSWX:AMAT:
Financial Strength: 9 (13% above median its 10-year median of 8.00)
GF Value™: CHF184.08 vs. price of CHF458.35 (149% above fair value)
No single metric tells the full story. See the XSWX: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.
80GF Score
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Financial Strength is just one metric. See GF Value™, 30-year financials, guru trades, warning signs, and more.
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