Applied Materials’ latest wafer fabrication equipment is in high demand due to increased usage of semiconductors in AI and HPC. Leading-edge foundry/logic, DRAM, and advanced packaging are expected to be the fastest-growing areas. AMAT specializes in key technologies like GAA transistors, hybrid bonding, and 3D device metrology.

AMAT expects a surge in next-gen technology production, benefiting from customers ramping up foundries. Growth in DRAM revenues from leading-edge customers exceeded 50% in 2025. However, growth was limited by trade restrictions, with China’s share of revenue declining. Wafer fab equipment spending in China is anticipated to decrease in 2026.

Competitors like Lam Research and ASML Holdings are strong players in WFE, especially in the DRAM and logic space. Lam Research’s memory products are gaining popularity, while ASML drives revenue through advanced systems. ASML anticipates a gross margin impact due to low-margin tools and lower upgrade revenues.

Applied Materials’ stock has outperformed the Electronics – Semiconductors industry, showing a 53% gain in the past year. The company trades at a lower forward P/S ratio than the industry average. Analysts forecast a 1.27% and 17.20% year-over-year growth in earnings for fiscal 2026 and 2027, with upward revisions in estimates. Applied Materials currently holds a Zacks Rank #3 (Hold).

Read more at Nasdaq: AMAT Gains From Traction in WFE Products: A Sign of More Upside?