On March 10, 2025, Applied Materials announced a 15% increase in its quarterly dividend and a substantial $10 billion share repurchase program. Despite these initiatives aimed at enhancing shareholder value, the company’s stock saw a 12% decline over the past week. This downturn coincided with broader market turmoil due to escalating trade tensions, leading the Nasdaq to enter bear market territory with a 10% decline. The semiconductor sector, including chipmakers like Nvidia and Broadcom, experienced significant pressure, which likely impacted AMAT, contributing to its share price decline amidst a challenging market backdrop.

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Over the last five years, Applied Materials has delivered a robust total shareholder return of 168.02%, which illustrates the company's significant growth during this period. This performance contrasts with a tougher recent year, where the company underperformed both the US Market, which returned 3.3%, and the US Semiconductor industry, which saw a 3.9% decline.

Key contributors to this five-year growth include substantial advancements in emerging technologies and AI, leading to increased market share. Product innovations, such as the launch of SEMVision™ H20 in February 2025, have also played a role. Additionally, the company has engaged in shareholder-friendly actions, such as multiple increases in quarterly dividends and significant share buybacks. As of March 2025, the Board approved a new $10 billion share repurchase program. Despite recent challenges with trade restrictions and local competition in China, the company's strategic investments in development and its market positioning continue to support its longer-term growth trajectory.

Our valuation report unveils the possibility Applied Materials' shares may be trading at a discount.

This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

Companies discussed in this article include NasdaqGS:AMAT.

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