⚠ Borrowing at Higher CouponsLow threat

Applied Materials (AMAT) — threat to the moat

Applied is replacing 3.9% debt with 4.0% and 4.6% debt while it buys back stock.

Applied's new borrowing is more expensive than its old. In September 2025 it issued notes at 4.000% and 4.600% and repaid notes that carried 3.900%1. It also set up a $2.0 billion revolving credit facility due to expire in September 20262.

Long-term debt ($M)5,461Oct 20235,460Oct 20246,455Oct 20255,245Jul 2026Applied Materials Form 10-K FY2024, FY2025 release, Q3 FY2026 10-Q
Debt rose in 2025, then part moved to short term.

The amounts are small against the company's cash flow, which was $7,958 million from operations in fiscal 20253. The risk is not solvency.

The risk is drift. Long-term debt rose from $5,460 million at October 2024 to $6,455 million at October 20254 while buybacks continued. Short-term debt was $1,299 million at July 20265.

Short-term debt has risen with the growth. It was $100 million at October 20256 and $1,299 million at July 20267, as notes approached maturity. The company can refinance it easily; the question is only at what rate.

The maturities are spread out. The new notes are due in 2031 and 20368, so the company faces no large refinancing in the next few years. Rising rates would lift its interest bill only slowly.

The line to watch is total debt against cash. If debt keeps rising while cash does not, the buybacks are being financed with borrowing rather than earnings.

References
  1. ReportedIn September 2025 it issued notes at 4.000% and 4.600% and repaid notes that carried 3.900%.
    Applied Materials Form 10-K for fiscal 2025 (year ended 26 October 2025) - financial statements and notes: capital returns, debt, investments, tax and geography. — FY2025 · publ. 12 December 2025 · source ↗
  2. ReportedIt also set up a $2.0 billion revolving credit facility due to expire in September 2026.
    Applied Materials Form 10-Q for the quarter ended 26 July 2026 - FY2026 segment basis (200mm moved to Semiconductor Systems), nine-month results, customer concentration, geography, the BIS settlement and the balance sheet - balance sheet, investments and liquidity. — Q3 FY2026 · publ. 20 August 2026 · source ↗
  3. ReportedThe amounts are small against the company's cash flow, which was $7,958 million from operations in fiscal 2025.
    Applied Materials fourth-quarter and fiscal 2025 results release, Form 8-K exhibit 99.1 - full-year income statement, cash flow, balance sheet, Display results and one-off items. — FY2025 · publ. 13 November 2025 · source ↗
  4. ReportedLong-term debt rose from $5,460 million at October 2024 to $6,455 million at October 2025 while buybacks continued.
    Applied Materials fourth-quarter and fiscal 2025 results release, Form 8-K exhibit 99.1 - full-year income statement, cash flow, balance sheet, Display results and one-off items. — FY2025 · publ. 13 November 2025 · source ↗
  5. ReportedShort-term debt was $1,299 million at July 2026.
    Applied Materials Form 10-Q for the quarter ended 26 July 2026 - FY2026 segment basis (200mm moved to Semiconductor Systems), nine-month results, customer concentration, geography, the BIS settlement and the balance sheet - balance sheet, investments and liquidity. — Q3 FY2026 · publ. 20 August 2026 · source ↗
  6. ReportedIt was $100 million at October 2025 and $1,299 million at July 2026, as notes approached maturity.
    Applied Materials fourth-quarter and fiscal 2025 results release, Form 8-K exhibit 99.1 - full-year income statement, cash flow, balance sheet, Display results and one-off items. — FY2025 · publ. 13 November 2025 · source ↗
  7. ReportedIt was $100 million at October 2025 and $1,299 million at July 2026, as notes approached maturity.
    Applied Materials Form 10-Q for the quarter ended 26 July 2026 - FY2026 segment basis (200mm moved to Semiconductor Systems), nine-month results, customer concentration, geography, the BIS settlement and the balance sheet - nine-month results, customer concentration, geography, capital returns and legal matters. — Q3 FY2026 · publ. 20 August 2026 · source ↗
  8. ReportedThe new notes are due in 2031 and 2036, so the company faces no large refinancing in the next few years.
    Applied Materials Form 10-K for fiscal 2025 (year ended 26 October 2025) - financial statements and notes: capital returns, debt, investments, tax and geography. — FY2025 · publ. 12 December 2025 · source ↗
Sources
Generated September 25, 2026