Applied MaterialsAMAT -6.16%85 Return-on-Tangible-Equity is 59.78% as of Apr. 2026, which is 12% below its 10-year median of 67.64. GuruFocus rates AMAT with a GF Score™ of 85/100 and a GF Value™ of $217.76 (Significantly Overvalued). The stock has 6 warning signs investors should review. Among 987 Semiconductors companies, Applied Materials ranks better than 95.04% on this metric.
Return-on-Tangible-Equity is calculated as Net Income divided by its average total shareholder tangible equity. Total shareholder tangible equity equals to Total Stockholders Equity minus Intangible Assets. Applied Materials's annualized net income for the quarter that ended in Apr. 2026 was $11,224 Mil. Applied Materials's average shareholder tangible equity for the quarter that ended in Apr. 2026 was $18,775 Mil. Therefore, Applied Materials's annualized Return-on-Tangible-Equity for the quarter that ended in Apr. 2026 was 59.78%.
The historical rank and industry rank for Applied Materials's Return-on-Tangible-Equity or its related term are showing as below:
AMAT'
s Return-on-Tangible-Equity Range Over the Past 10 Years
Min: 44.43 Med: 67.64 Max: 79.12
Current: 50.33
During the past 13 years, Applied Materials's highest Return-on-Tangible-Equity was 79.12%. The lowest was 44.43%. And the median was 67.64%.
AMAT's Return-on-Tangible-Equity is ranked better than 95.04% of 987
companies
in the Semiconductors industry
Industry Median: 5.19
vs AMAT: 50.33
Return-on-Tangible-Equity measures the rate of return on the ownership interest (shareholder's tangible equity) of the common stock owners. It measures a firm's efficiency at generating profits from every unit of shareholders' tangible equity (shareholders equity minus intangibles). Return-on-Tangible-Equity shows how well a company uses investment funds to generate earnings growth. Return-on-Tangible-Equitys between 15% and 20% are considered desirable.
Be Aware
Net Income is used.
Because a company can increase its Return-on-Tangible-Equity by having more financial leverage, it is important to watch the leverage ratio when investing in high Return-on-Tangible-Equity companies. Like Return-on-Tangible-Asset, Return-on-Tangible-Equity is calculated with only 12 months data. Fluctuations in company's earnings or business cycles can affect the ratio drastically. It is important to look at the ratio from a long term perspective.
Asset light businesses require very few assets to generate very high earnings. Their Return-on-Tangible-Equitys can be extremely high.
Applied Materials Return-on-Tangible-Equity Related Terms
Applied Materials Return-on-Tangible-Equity Historical Data
* Premium members only.
The historical data trend for Applied Materials's Return-on-Tangible-Equity 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: Return-on-Tangible-Equity Comparison
For the Semiconductor Equipment & Materials subindustry, Applied Materials's Return-on-Tangible-Equity, along with its competitors' market caps and Return-on-Tangible-Equity 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 Return-on-Tangible-Equity vs Semiconductors Industry
For the Semiconductors industry and Technology sector, Applied Materials's Return-on-Tangible-Equity distribution charts can be found below:
* The bar in red indicates where Applied Materials's Return-on-Tangible-Equity 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.
In the calculation of annual Return-on-Tangible-Equity, the net income of the last fiscal year and the average total shareholder tangible equity over the fiscal year are used. In calculating the quarterly data,
the net income data used here is four times the quarterly (Apr. 2026) net income data.
Return-on-Tangible-Equity is displayed in the 10-year financial page.
What does a Return-on-Tangible-Equity of 59.78% mean?
Applied Materials (AMAT) has a Return-on-Tangible-Equity of 59.78% as of Apr. 2026. Return on tangible equity is the ratio of current-period net income to average two-period tangible equity. View historical data on Applied Materials and its competitors. This is 12% below median its historical median of 67.64. Over the past decade, Applied Materials' Return-on-Tangible-Equity has ranged from 44.43 to 79.12. According to the industry distribution chart, Applied Materials ranks #49 out of 987 companies in the Semiconductors industry, placing it in the top 5%.
Is Applied Materials' Return-on-Tangible-Equity too high?
Applied Materials' current Return-on-Tangible-Equity of 59.78% is 12% below median its 10-year median of 67.64. Over the past 10 years, this metric has ranged from a low of 44.43 to a high of 79.12. The Semiconductors industry median Return-on-Tangible-Equity is 5.19. Applied Materials' value of 59.78% is 1051.8% above this industry median. Based on the distribution chart, Applied Materials ranks #49 out of 987 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' Return-on-Tangible-Equity compare to LRCX and KLAC?
According to the Semiconductors industry distribution chart, Applied Materials ranks #49 out of 987 companies for Return-on-Tangible-Equity. This places Applied Materials in the top 5% of its industry — outperforming the majority of peers. The industry median Return-on-Tangible-Equity is 5.19. Applied Materials' value of 59.78% is 1051.8% above this benchmark. Historically, Applied Materials' own Return-on-Tangible-Equity has ranged from 44.43 to 79.12 over the past decade. While the company's 10-year median is 67.64 vs. the industry median of 5.19, 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 Return-on-Tangible-Equity for a Semiconductors company?
The median Return-on-Tangible-Equity among Semiconductors companies is 5.19, based on 987 companies in the industry. Companies in the top quartile (top 25%) have a Return-on-Tangible-Equity significantly above this median, while those in the bottom quartile fall well below. However, Return-on-Tangible-Equity should not be evaluated in isolation — investors should consider it alongside profitability, growth, and financial strength metrics. Applied Materials's current Return-on-Tangible-Equity of 59.78% is 1051.8% 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 Return-on-Tangible-Equity mean?
A high Return-on-Tangible-Equity can signal that a stock is expensive relative to its fundamentals. Return on tangible equity is the ratio of current-period net income to average two-period tangible equity. View historical data on Applied Materials and its competitors. For the Semiconductors industry, the median Return-on-Tangible-Equity is 5.19 — values significantly above this may indicate overvaluation, while values below may suggest a bargain or underlying issues. Applied Materials's current Return-on-Tangible-Equity is 59.78%, which is 12% below median its own 10-year median of 67.64. 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 $217.76, compared to a current price of $626.84 — trading 187.9% above its estimated fair value. The current Return-on-Tangible-Equity is 59.78%, which is 12% below median its 10-year median of 67.64 and 1051.8% above the Semiconductors industry median of 5.19. 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 Return-on-Tangible-Equity calculated?
Return-on-Tangible-Equity is calculated from a company's financial statements. For Applied Materials (AMAT), the current Return-on-Tangible-Equity is 59.78% 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 $626.84 is trading 187.9% above its estimated GF Value™ of $217.76.
GuruFocus considers Applied Materials to be Significantly Overvalued.
Key valuation signals for AMAT:
Return-on-Tangible-Equity: 59.78% (12% below median its 10-year median of 67.64)
GF Value™: $217.76 vs. price of $626.84 (187.9% above fair value)
Industry Position: 1051.8% above the Semiconductors median (#49 of 987)
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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