6. Applied Materials, Inc. (NASDAQ:AMAT)
Number of Hedge Fund Holders: 74
Applied Materials, Inc. (NASDAQ:AMAT) is a global leader in semiconductor equipment manufacturing, supplying critical tools for creating advanced chips used in AI, data centers, automotive technology, and other sectors. The global semiconductor manufacturing equipment market is projected to more than double by 2032, with Applied Materials likely to be a major beneficiary of this growth. Beyond just selling its equipment, the company has seen a significant boost in revenue from its equipment servicing segment. As manufacturing equipment becomes more complex and specialized, the demand for expert maintenance continues to rise, contributing to this fast-growing part of the business. In the past 12 months, the stock has surged by over 16%.
In the fourth quarter of 2024, Applied Materials, Inc. (NASDAQ:AMAT) reported revenue of $7.05 billion, which showed a 5% growth from the same period last year. The company’s net income for the quarter came in at $1.73 billion. Its diverse range of products and services strategically positions the company to support its customers in advancing AI and energy-efficient computing. As these critical areas of semiconductor innovation gain prominence, the industry’s progress increasingly relies on materials engineering, a field where Applied Materials holds a leading position.
Applied Materials, Inc. (NASDAQ:AMAT) also showed a strong cash position in FY24. The company reported an operating cash flow of $8.68 billion during the year. Its free cash flow amounted to $7.5 billion. Moreover, the company returned approximately $5.01 billion to shareholders, including $1.19 billion in dividends. It is one of the best dividend stocks on our list as the company has been growing its payouts for seven consecutive years. Currently, it offers a quarterly dividend of $0.40 per share and has a dividend yield of 0.89%, as of January 15.
Vltava Fund highlighted Applied Materials, Inc. (NASDAQ:AMAT) in its recently published Q4 2024 investor letter. Here is what the firm has to say:
“In the quarter just ended, we added to the portfolio two new companies from the technology sector: Applied Materials, Inc. (NASDAQ:AMAT) and Lam Research. Both are in the same industry as is another of our investments that we have held for some time, KLA Corporation. This industry is termed semiconductor devices and materials. One chapter in Hidden Investment Treasures is devoted to investing in technology companies and, among other things, the controversy over what really constitutes a technology company. As investors, we try to view technology companies not according to the industry into which they are formally classified but by whether the technologies and technological processes used in the production of their products and services are an essential element in value creation or if they are a source of long-term, sustainable competitive advantage. Among the companies that are formally categorized as technology-based and fall into either the Information Technology or the Communications Services sector, we find some that can be said to be just that but also others for which this classification is at least debatable. Similarly, among companies that do not formally belong to these two sectors, we find many that clearly are built to a large extent on technology and base their market positions and competitiveness on it. In the cases of Applied Materials and Lam Research, there can be no doubt that these are technology companies not only as a formality but also in fact.
Of the 900 hedge funds tracked by Insider Monkey at the end of Q3 2024, 74 funds held stakes in Applied Materials, Inc. (NASDAQ:AMAT), compared with 77 in the previous quarter. The consolidated value of these stakes is over $4.6 billion.
