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AMAT Options Signal Bullish Rebound Ahead of Earnings
14 Jul
Summary
- Unusual out-of-the-money put options activity detected for AMAT stock.
- Buyers of deep OTM puts expect a significant drop post-earnings.
- Analysts project substantial revenue and free cash flow growth for AMAT.
Applied Materials (AMAT) is experiencing highly unusual out-of-the-money (OTM) put options activity, occurring as the stock trades below its recent peak. This intriguing market behavior emerges just over a month before the company's fiscal Q3 earnings release, scheduled for August 13, 2026. Deep OTM put contracts with a strike price of $330.00, nearly 43% below the current trading price, have seen significant volume.
Market observers suggest that the buyers of these puts anticipate a severe downturn following the earnings announcement, possibly linked to a sharp decline in free cash flow (FCF). However, last quarter's lower FCF was attributed to one-time payments, with analysts forecasting a strong rebound. Projections indicate Q3 revenue could reach $9.01 billion, a 23% increase year-over-year. Based on historical FCF margins, this growth could push FCF over $2.52 billion, indicating a potentially bullish outlook despite the speculative put activity.
