Applied Materials Inc (AMAT) is overvalued and Lam Research Corp (LRCX) is overvalued.
Both trade above our estimate of their intrinsic value. LRCX is the closer of the two: -57%, 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 $197.54; the price of $310.96 is 57% above that value.
Leak Score 65/100 on 10 of 12 signals
| Metric | AMAT | LRCX |
|---|---|---|
| Verdict | Overvalued | Overvalued |
| Price | $472.46 | $310.96 |
| Intrinsic value | $145.26 | $197.54 |
| Margin of safety | -225% | -57% |
| Leak Score | 73/100 (10/12) | 65/100 (10/12) |
| Market cap | $374.9B | $389.1B |
| Revenue growth, 5 years | 10.5% | 9.7% |
| Operating margin | 31.1% | 35.3% |
| Net margin | 30.0% | 31.3% |
| Return on equity | 41.1% | 65.1% |
| Debt to equity | 0.29 | 0.33 |
| P/E | 40.7x | 54.0x |
| Forward P/E | 25.2x | 26.2x |
| P/B | 14.6x | 31.2x |
| Dividend yield | 0.4% | 0.4% |