UBS Upgrades Applied Materials (AMAT) to Buy

UBS analyst Timothy Arcuri upgraded Applied Materials (NASDAQ: AMAT) from Neutral to Buy with a price target of $285.00 (from $250.00).

The analyst comments: "We are upgrading Applied Materials (AMAT) to Buy and raising our price target to $285 from $250, reflecting a significantly more bullish outlook for wafer fab equipment (WFE) in C2026/2027E. Our revised forecast calls for 2026 WFE to increase more than 20% Y/Y to $136.5B, driven primarily by memory. We now expect DRAM WFE to rise by ~$13B Y/Y (vs. our prior ests of ~$9B), accounting for more than half of the anticipated ~$25B increase in total WFE. Looking ahead to 2027, we believe WFE approaches $145B, a level well above current Street expectations. Importantly, within our coverage universe, AMAT stands out as the largest beneficiary of this DRAM spending surge (see Figure 3). In addition, we believe the company - and the broader industry - is underestimating the strength of China’s WFE demand in 2026, which we view as another source of upside and a meaningful tailwind for AMAT."

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Shares of Applied Materials closed at $230.91 yesterday.

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