Applied Materials Inc (AMAT) is overvalued and KLA Corp (KLAC) is overvalued.
Both trade above our estimate of their intrinsic value. KLAC is the closer of the two: -77%, against -225% for AMAT.
Values as of the 22 Sept 2026 close.
Discounting its cash flows at 12.0% (average of 3 methods) values the shares at $145.26; the price of $472.46 is 225% above that value, and 66% of that value comes from beyond year five.
Leak Score 73/100 on 10 of 12 signals
A 10.6x revenue multiple, adjusted for growth and margin, values the shares at $106.46; the price of $188.32 is 77% above that value.
Leak Score 57/100 on 8 of 12 signals
| Metric | AMAT | KLAC |
|---|---|---|
| Verdict | Overvalued | Overvalued |
| Price | $472.46 | $188.32 |
| Intrinsic value | $145.26 | $106.46 |
| Margin of safety | -225% | -77% |
| Leak Score | 73/100 (10/12) | 57/100 (8/12) |
| Market cap | $374.9B | $246.0B |
| Revenue growth, 5 years | 10.5% | 14.4% |
| Operating margin | 31.1% | 41.7% |
| Net margin | 30.0% | 35.6% |
| Return on equity | 41.1% | 87.5% |
| Debt to equity | 0.29 | 0.97 |
| P/E | 40.7x | 51.4x |
| Forward P/E | 25.2x | 27.9x |
| P/B | 14.6x | 38.8x |
| Dividend yield | 0.4% | 0.5% |