Bernstein released its top chip stocks for 2026, favoring Nvidia and Broadcom due to their role in global chip manufacturing. Despite AMD’s inference expertise, Bernstein rates Nvidia higher. Applied Materials is bullish on, despite high valuations. AMAT leads in semiconductor equipment and services, with an 80% stock return in the last year.

AMAT’s valuations are high but justified by stable earnings growth. The company is expected to outperform Micron in the long term. The 0.58% dividend yield is lower than historic levels due to last year’s rally. AMAT’s Q4 earnings beat estimates, marking the 6th consecutive year of growth.

Increased AI adoption and demand for semiconductor manufacturing will keep AMAT busy in 2026. Geopolitical issues, export restrictions, and AI equipment ramps pose challenges. Wall Street analysts are bullish on AMAT, with a majority rating it as a “Strong Buy.” Bernstein raised the stock’s target price to $325.

Despite not being the flashiest AI stock, AMAT has strong Wall Street coverage. Analysts are optimistic about the stock, with a target price of $425 offering 38% upside. Bernstein’s positive outlook on AMAT is driven by increased spending on memory chips.

Read more at Yahoo Finance: Bernstein Loves This 1 Lesser-Known Chip Stock for 2026