Applied Materials (AMAT) stock rose 1.13% after Deutsche Bank upgraded it to a “Buy” with a $390 price target, citing favorable conditions in wafer fabrication equipment spending. Major capital expenditure increases from TSM and Intel are driving optimism, along with rising chip complexity benefiting AMAT’s deposition and etching processes.

AMAT stock, valued at $255 billion, has nearly tripled investor returns in three years, currently trading at $319 per share. Despite trade war challenges, the company achieved record revenue of $28.4 billion in fiscal 2025, with gross margins hitting nearly 49%, the highest in 25 years.

While China market restrictions impacted AMAT’s growth, the company maintains market share in leading-edge DRAM outside of China. With a strategic focus on AI infrastructure buildout, AMAT anticipates significant growth in semiconductor equipment spending in the coming years, holding a strong position in logic capacity and DRAM wafer starts supporting AI data centers.

AMAT expects revenue to remain steady in the first half of the year before accelerating as new capacity comes online. Analysts project revenue to grow from $28.4 billion in fiscal 2025 to nearly $39 billion in 2030, with adjusted earnings per share forecasted to increase from $9.42 to $15.60. Trading at 33.4x forward earnings, the stock is considered expensive.

Of the 36 analysts covering AMAT stock, 22 recommend “Strong Buy,” three recommend “Moderate Buy,” and 11 recommend “Hold.” The average price target is $296.97. Analysts expect AMAT stock to dominate in 2026, with potential growth but caution against current pricing levels.

Read more at Yahoo Finance: Analysts Expect Applied Materials Stock to Dominate in 2026. Should You Buy Shares Now?