Applied Materials(AMAT) ZACKS·2025-01-20 15:36Core Viewpoint - The average brokerage recommendation (ABR) for Applied Materials (AMAT) is 1.79, indicating a general suggestion to buy the stock, but reliance solely on this metric may not be advisable due to potential biases in brokerage recommendations [2][4]. Group 1: Brokerage Recommendations - The ABR of 1.79 is based on recommendations from 33 brokerage firms, with 20 firms rating it as Strong Buy and 2 as Buy, representing 60.6% and 6.1% of total recommendations respectively [2]. - Brokerage analysts tend to exhibit a strong positive bias in their ratings, often issuing five "Strong Buy" recommendations for every "Strong Sell" [5][9]. - The ABR may not accurately reflect the true potential of a stock due to the vested interests of brokerage firms, which can mislead investors [9]. Group 2: Zacks Rank Comparison - The Zacks Rank, a proprietary stock rating tool, categorizes stocks from 1 (Strong Buy) to 5 (Strong Sell) and is based on earnings estimate revisions, making it a more reliable indicator of near-term stock performance [7][10]. - The Zacks Rank is updated more frequently than the ABR, as it reflects real-time changes in earnings estimates, providing timely predictions for stock prices [11]. - For Applied Materials, the Zacks Consensus Estimate for the current year has decreased by 0.1% to $9.37, leading to a Zacks Rank of 4 (Sell), indicating potential downward pressure on the stock [12][13].