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Applied Materials: A Dividend Payer in the Semiconductor Supply Chain

Applied Materials, Inc. (NASDAQ:AMAT) is one of the 10 Technology Dividend Aristocrats to Buy in 2025.

Semiconductor stocks have delivered solid long-term returns, but investors need to be selective. Among the equipment suppliers, Applied Materials, Inc. (NASDAQ:AMAT) stands out for its broad diversification and consistent dividend policy. With artificial intelligence driving long-term demand, the company is emerging as a compelling option for dividend growth investors.

A technician in a clean room assembling a semiconductor chip using a microscope.

Earlier this year, on March 10, Applied Materials, Inc. (NASDAQ:AMAT) announced a 15% increase to its quarterly dividend, raising it to $0.46 per share. This marks the eighth straight year of dividend hikes. Alongside this, the board approved a new $10 billion share repurchase program, which adds to the $7.6 billion still available under the existing authorization.

Applied Materials, Inc. (NASDAQ:AMAT)’s financial position remains solid. In the most recent quarter, it generated $1.57 billion in operating cash flow and returned $325 million to shareholders through dividends. Free cash flow came in at $1.06 billion. With a dividend payout ratio of just 19%, Applied is distributing only a modest portion of its net income, signaling plenty of room for future increases.

Applied Materials, Inc. (NASDAQ:AMAT)  also holds a leadership position in etch and deposition tools, which are key technologies used in manufacturing high-performance logic chips and DRAM, both of which are in high demand due to the rapid expansion of AI. This market tailwind is expected to support both business growth and continued strength in shareholder returns. AMAT has a dividend yield of 1.09%, as of June 22.

While we acknowledge the potential of AMAT as an investment, we believe certain AI stocks offer greater upside potential and carry less downside risk. If you’re looking for an extremely undervalued AI stock that also stands to benefit significantly from Trump-era tariffs and the onshoring trend, see our free report on the best short-term AI stock.

READ NEXT: 10 Best Dividend Stocks for a Bear Market and 10 Best Dividend Stocks to Buy for Dependable Dividend Growth.

Disclosure. None.

The $250 Trillion AI Hype is Real. A few years from now, you’ll probably wish you’d bought this stock.

When Jeff Bezos said that one breakthrough technology would shape Amazon’s destiny, even Wall Street’s biggest analysts were caught off guard.

Fast forward a year and Amazon’s new CEO Andy Jassy described generative AI as a “once-in-a-lifetime” technology that is already being used across Amazon to reinvent customer experiences.

At the 8th Future Investment Initiative conference, Elon Musk predicted that by 2040 there would be at least 10 billion humanoid robots, with each priced between $20,000 and $25,000.

Do the math. According to Musk, this technology could be worth $250 trillion by 2040.

Put another way, that’s roughly equal to:

  • 175 Teslas
  • 107 Amazons
  • 140 Metas
  • 84 Googles
  • 65 Microsofts
  • And 55 Nvidias

And here’s the wild part — this $250 trillion wave isn’t tied to one company, but to an entire ecosystem of AI innovators set to reshape the global economy.

It’s a leap so massive, it could reshape how businesses, governments, and consumers operate worldwide.

Even if that $250 trillion figure sounds ambitious, major firms like PwC and McKinsey still see AI unlocking multi-trillion-dollar potential.

How could anything be worth that much?

The answer lies in a breakthrough so powerful it’s redefining how humanity works, learns, and creates.

And this breakthrough has already set off a frenzy among hedge funds and Wall Street’s top investors.

What most investors don’t realize is that one under-owned company holds the key to this $250 trillion revolution.

In fact, Verge argues this company’s supercheap AI technology should concern rivals.

Before I reveal the details, let’s talk about how some of the richest people on the planet are positioning themselves.

  • Bill Gates sees artificial intelligence as the “biggest technological advance in my lifetime,” more transformative than the internet or personal computer, capable of improving healthcare, education, and addressing climate change.
  • Larry Ellison — through Oracle, is spending billions on Nvidia chips and partnering with Cohere to embed generative AI across Oracle’s cloud and apps.
  • Warren Buffett — not known for tech hype — says this breakthrough could have a ‘hugely beneficial social impact.

When billionaires from Silicon Valley to Wall Street line up behind the same idea — you know it’s worth paying attention to.

Even as we admire what Tesla, Nvidia, Alphabet, and Microsoft have built, we believe an even greater opportunity lies elsewhere…

But the real story isn’t Nvidia — it’s a much smaller company quietly improving the critical technology that makes this entire revolution possible.

And judging by what I’m hearing from both Silicon Valley insiders and Wall Street veterans…

This prediction might not be bold at all:

A few years from now, you’ll wish you’d owned this stock.

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