In the rapidly evolving semiconductor industry, two notable players, Applied Materials, Inc. (AMAT) and Nova Ltd. (NVMI), stand out for their innovative approaches and market strategies. While both companies focus on providing essential equipment and services to semiconductor manufacturers, they differ in their specialization and geographical reach. This article will explore which of these companies presents a more compelling investment opportunity, helping you make an informed decision for your portfolio.
Table of contents
Company Overview
Applied Materials, Inc. Overview
Applied Materials, Inc. (AMAT) stands as a leader in the semiconductor manufacturing equipment sector. Founded in 1967 and headquartered in Santa Clara, California, its mission is to enable the creation of innovative technology that improves the quality of life. The company operates through three segments: Semiconductor Systems, Applied Global Services, and Display and Adjacent Markets, providing essential tools and services for semiconductor and display industries. With a market capitalization of approximately $201B, AMAT boasts a diverse international presence, including operations in the United States, Asia, and Europe. Its dedication to advancing semiconductor technology underpins its prominent market position.
Nova Ltd. Overview
Nova Ltd. (NVMI), established in 1993 and based in Rehovot, Israel, specializes in designing and producing advanced process control systems for semiconductor manufacturing. The company focuses on metrology platforms critical for ensuring quality and precision in semiconductor production. Nova serves a variety of sectors, including logic and memory manufacturers, with a market cap of around $9.23B. The company’s commitment to innovation and excellence in metrology solutions positions it as a vital player within the global semiconductor landscape.
Key similarities and differences
Both Applied Materials and Nova Ltd. operate within the semiconductor industry, focusing on providing essential technologies for manufacturing processes. However, while Applied Materials offers a broader range of manufacturing equipment and services, Nova Ltd. specializes in metrology solutions. This distinction highlights Applied Materials’ comprehensive approach versus Nova’s targeted expertise in process control systems.
Income Statement Comparison
The following table compares the income statements of Applied Materials, Inc. (AMAT) and Nova Ltd. (NVMI) for their most recent fiscal years, highlighting key financial metrics.
| Metric | Applied Materials, Inc. | Nova Ltd. |
|---|---|---|
| Market Cap | 201B | 9.23B |
| Revenue | 28.37B | 672.40M |
| EBITDA | 9.65B | 204.92M |
| EBIT | 9.54B | 187.54M |
| Net Income | 6.99B | 183.76M |
| EPS | 8.71 | 6.31 |
| Fiscal Year | 2025 | 2024 |
Interpretation of Income Statement
In the latest fiscal years, Applied Materials (AMAT) has demonstrated significant revenue growth, increasing from 27.18B in 2024 to 28.37B in 2025, reflecting a robust demand in the semiconductor sector. Meanwhile, Nova Ltd. (NVMI) reported a revenue rise from 517.92M in 2023 to 672.40M in 2024, although growth appears more modest comparatively. Both companies maintain healthy margins, with AMAT’s EBITDA margin showing strong resilience. AMAT’s net income, however, reflects a slight decrease from 7.18B to 6.99B, indicating potential cost pressures or market dynamics impacting profitability. In contrast, NVMI’s net income growth showcases effective cost management despite lower revenue. Overall, AMAT remains a strong performer, while NVMI shows promising growth potential.
Financial Ratios Comparison
The following table provides a comparison of key financial ratios for Applied Materials, Inc. (AMAT) and Nova Ltd. (NVMI) based on the most recent available data.
| Metric | AMAT | NVMI |
|---|---|---|
| ROE | 34.28% | 19.81% |
| ROIC | 22.03% | 13.39% |
| P/E | 26.78 | 31.20 |
| P/B | 9.18 | 6.18 |
| Current Ratio | 2.61 | 2.32 |
| Quick Ratio | 1.87 | 1.92 |
| D/E | 0.32 | 0.25 |
| Debt-to-Assets | 18.06% | 16.98% |
| Interest Coverage | 30.81 | 116.20 |
| Asset Turnover | 0.78 | 0.48 |
| Fixed Asset Turnover | 6.15 | 5.06 |
| Payout ratio | 19.26% | 0.00% |
| Dividend yield | 0.72% | 0.00% |
Interpretation of Financial Ratios
AMAT demonstrates stronger profitability with a higher ROE and ROIC compared to NVMI, indicating more effective use of equity and invested capital. The current and quick ratios suggest AMAT has a better liquidity position. However, NVMI’s exceptional interest coverage ratio indicates robust capacity to meet interest obligations. Both companies show a solid debt management profile, but AMAT’s higher P/E ratio may suggest it is more valued by the market, albeit with potentially lower growth expectations than NVMI.
Dividend and Shareholder Returns
Applied Materials, Inc. (AMAT) currently pays a dividend with a payout ratio of approximately 19.3%, indicating a healthy balance between returns and retained earnings for growth. The annual dividend yield stands at 0.72%, with a consistent history of dividend increases. In contrast, Nova Ltd. (NVMI) does not distribute dividends, opting instead to reinvest profits to fuel growth and innovation, which may align with long-term value creation. Both companies engage in share buybacks, enhancing shareholder returns. Overall, AMAT’s approach supports sustainable returns, while NVMI’s strategy may appeal to growth-oriented investors.
Strategic Positioning
Applied Materials, Inc. (AMAT) holds a significant market share in the semiconductor manufacturing equipment sector, leveraging its extensive portfolio across three segments. In contrast, Nova Ltd. (NVMI) specializes in process control systems and competes by offering advanced metrology solutions. Both companies face competitive pressure as technological disruptions shape the industry, necessitating continuous innovation to maintain their market positions. Investors should evaluate these dynamics to assess potential risks and opportunities.
Stock Comparison
In this section, I will analyze the weekly stock price movements of Applied Materials, Inc. (AMAT) and Nova Ltd. (NVMI) over the past year, highlighting significant price dynamics and trading behaviors.
Trend Analysis
Applied Materials, Inc. (AMAT) Over the past year, AMAT has experienced a remarkable price increase of 69.3%. This indicates a bullish trend, characterized by acceleration in its upward trajectory. The stock reached a high of $252.25 and a low of $126.95, with a standard deviation of 26.55, suggesting notable volatility. In the recent period from September 14, 2025, to November 30, 2025, the price rose by 50.33%, with a trend slope of 5.33 and a standard deviation of 21.15. This reinforces the bullish sentiment surrounding AMAT.
Nova Ltd. (NVMI) NVMI has shown an impressive price change of 141.91% over the past year, also reflecting a bullish trend. However, the acceleration status indicates deceleration, suggesting that the pace of growth is slowing. The stock’s highest price was $345.06, while the lowest was $129.32, with a standard deviation of 48.52, pointing to significant volatility. In the recent analysis period from September 14, 2025, to November 30, 2025, NVMI’s price increased by 6.73% but exhibited a slight negative trend slope of -0.39 with a standard deviation of 19.49, indicating a potential stabilization phase after the prior gains.
Both stocks present opportunities, but the recent data suggests AMAT is experiencing stronger momentum compared to NVMI.
Analyst Opinions
Recent recommendations for Applied Materials, Inc. (AMAT) and Nova Ltd. (NVMI) reflect a consensus rating of B+. Analysts highlight strong return on equity and return on assets for both companies, with AMAT’s return on equity scoring 5 and NVMI scoring 4. However, both have lower scores for debt-to-equity and price-to-book ratios, indicating some caution. Notably, analysts encourage a buy stance for both stocks in the current year, attributing their recommendations to solid fundamentals and growth potential.
Stock Grades
In the current market landscape, I have gathered stock grades from reputable grading companies for two companies: Applied Materials, Inc. (AMAT) and Nova Ltd. (NVMI). Below are the details of these grades.
Applied Materials, Inc. Grades
| Grading Company | Action | New Grade | Date |
|---|---|---|---|
| UBS | upgrade | Buy | 2025-11-25 |
| Citigroup | maintain | Buy | 2025-11-14 |
| Mizuho | maintain | Neutral | 2025-11-14 |
| Needham | maintain | Buy | 2025-11-14 |
| Craig-Hallum | downgrade | Hold | 2025-11-14 |
| JP Morgan | maintain | Overweight | 2025-11-14 |
| Wells Fargo | maintain | Overweight | 2025-11-14 |
| B. Riley Securities | maintain | Buy | 2025-11-14 |
| Cantor Fitzgerald | maintain | Overweight | 2025-11-14 |
| Morgan Stanley | maintain | Overweight | 2025-11-14 |
Nova Ltd. Grades
| Grading Company | Action | New Grade | Date |
|---|---|---|---|
| Evercore ISI Group | maintain | Outperform | 2025-11-07 |
| Benchmark | maintain | Buy | 2025-11-07 |
| B of A Securities | maintain | Buy | 2025-06-24 |
| Cantor Fitzgerald | maintain | Overweight | 2025-06-24 |
| Citigroup | maintain | Buy | 2025-05-09 |
| Benchmark | maintain | Buy | 2025-05-09 |
| B of A Securities | maintain | Buy | 2025-04-16 |
| Cantor Fitzgerald | maintain | Overweight | 2025-03-14 |
| Benchmark | maintain | Buy | 2025-02-14 |
| Needham | maintain | Hold | 2025-02-14 |
Overall, both companies have received mostly positive grades, with AMAT showing a recent upgrade to “Buy” from UBS, indicating a bullish outlook. NVMI maintains a stable position with consistent “Buy” ratings from multiple firms, suggesting a strong sentiment among analysts.
Target Prices
The current target price consensus for Applied Materials, Inc. (AMAT) and Nova Ltd. (NVMI) indicates optimistic projections from analysts.
| Company | Target High | Target Low | Consensus |
|---|---|---|---|
| Applied Materials, Inc. | 290 | 205 | 249.27 |
| Nova Ltd. | 224 | 210 | 217 |
For Applied Materials, the consensus target price of 249.27 is slightly below the current stock price of 252.31, suggesting a potential for slight correction or stabilization. In contrast, Nova Ltd.’s consensus of 217 is below its current price of 312.84, indicating that the stock may be overvalued based on analyst expectations.
Strengths and Weaknesses
The following table summarizes the strengths and weaknesses of Applied Materials, Inc. (AMAT) and Nova Ltd. (NVMI) based on the most recent data.
| Criterion | Applied Materials, Inc. (AMAT) | Nova Ltd. (NVMI) |
|---|---|---|
| Diversification | High, offers multiple segments | Moderate, focused on process control systems |
| Profitability | Strong margins (net profit margin: 24.67%) | Moderate margins (net profit margin: 26.33%) |
| Innovation | High investment in R&D | Moderate investment in new technologies |
| Global presence | Strong, operates in multiple regions | Strong, presence in key semiconductor markets |
| Market Share | Leading position in semiconductor equipment | Niche player in metrology systems |
| Debt level | Low (debt to equity ratio: 0.32) | Low (debt to equity ratio: 0.25) |
In summary, both companies exhibit strong fundamentals, but AMAT has a more diversified portfolio and a leading market position, while NVMI excels in profitability and has a solid global presence. Choosing between them should align with your investment strategy and risk tolerance.
Risk Analysis
In this section, I present a comparative analysis of key risks associated with Applied Materials, Inc. (AMAT) and Nova Ltd. (NVMI).
| Metric | Applied Materials, Inc. | Nova Ltd. |
|---|---|---|
| Market Risk | High | Moderate |
| Regulatory Risk | Moderate | High |
| Operational Risk | Moderate | Moderate |
| Environmental Risk | Low | Moderate |
| Geopolitical Risk | Moderate | High |
Both companies face significant market and regulatory risks, particularly considering the semiconductor industry’s volatility and global supply chain disruptions. The geopolitical landscape, especially tensions involving China, adds to the uncertainty for both firms.
Which one to choose?
When comparing Applied Materials, Inc. (AMAT) and Nova Ltd. (NVMI), both companies exhibit strong fundamentals with B+ ratings, but they cater to slightly different investor preferences. AMAT has a robust revenue growth trajectory, with a market cap of $187.4B and a net income of approximately $6.998B for FY 2025. Its current ratio of 2.61 and operating margin of 29.22% suggest strong financial health. Conversely, NVMI, with a market cap of $5.73B, reported a net income of $183.76M, showcasing a higher gross profit margin of 57.57%, although its growth appears to be decelerating recently.
Investors focused on growth may prefer AMAT due to its larger scale and consistent performance, while those seeking potential value in a smaller company might find NVMI appealing, despite its current challenges. However, both companies face industry risks related to competition and valuation pressures.
Disclaimer: This article is not financial advice. Each investor is responsible for their own investment decisions.
Go further
I encourage you to read the complete analyses of Applied Materials, Inc. and Nova Ltd. to enhance your investment decisions:
