Applied Global Services — Scenario Model

Current Price

$363

Applied Global Services Component

$100/sh

Market Implies

95% chance of upside scenarios

5% bear probability

Scenario Overview

Scenario	EV	$/sh	Prob	Key Gate
bull	$55B	$55	75%	software
base	$33B	$33	20%	subscription
bear	$19B	$19	5%	china base loss

Growth is gated by milestones. Cost step-changes and capability unlocks are tied to specific milestones.

2026

subscription

AGS fully transitions to recurring subscription model

Unlocks: Improves revenue visibility, margin predictability, and investor perception

AMAT announced full recurring transition starting Q1 FY2026

2029

software

Software-enabled services (predictive maintenance, digital twin) reach scale

Unlocks: Adds 2-3pp to margins through near-zero marginal cost software revenue

AMAT developing software capabilities at EPIC Center

2026

china base loss

Export controls restrict servicing of tools in Chinese fabs

Unlocks: Reduces addressable installed base by 10-15%. Service revenue from China tools at risk.

Currently allowed under existing rules, but political risk remains

Blue = input · Black = computed · Click to expand

Given these scenario EVs, what probability weights would the market need to assign to produce the current market-implied value of $100/share?

Scenario	AGS EV	Per Share	Implied Prob.	Weighted Contrib.
bull	$55B	$67	75.0%	$50
base	$33B	$41	20.0%	$8
bear	$19B	$23	5.0%	$1
Total			100%	$59/sh

Note: These probabilities apply to AGS' contribution to AMAT equity. Semi Systems, Display & Adjacent, and net cash contribute separately.

Target contribution: $100/sh. Residual: $40.7/sh.