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Investing.com - Goldman Sachs has reiterated its Buy rating and $215.00 price target on Applied Materials (NASDAQ:AMAT), currently trading at $188.24, despite expectations of a near-term pullback in the stock. According to InvestingPro data, the company maintains a "GOOD" overall financial health score, with analyst targets ranging from $165 to $250.
The investment bank cited weak guidance driven by a $500 million drop in China as capacity is digested, along with isolated pushouts from select leading-edge logic customers worth another $500 million.
Goldman Sachs noted these headwinds are partially offset by trailing-edge logic strength elsewhere, which contributes approximately $400 million in positive impact.
The firm acknowledged that investor expectations had already moderated heading into the earnings call following cautious commentary from peers regarding 2026 outlook, though the China weakness is materializing earlier than Goldman had forecast.
Goldman Sachs maintains a muted view on wafer fabrication equipment growth in 2026, projecting just 2% growth below Street expectations, but believes Applied Materials is positioned to outperform peers due to its high relative exposure to deposition and etch technologies. With revenue of $28.09 billion in the last twelve months and a robust gross profit margin of 48.14%, the company shows strong fundamentals. Get deeper insights and access to 13 additional ProTips with InvestingPro’s comprehensive analysis.
In other recent news, Applied Materials Inc. reported impressive financial results for the third quarter of fiscal 2025. The company’s earnings per share reached $2.48, surpassing analysts’ expectations of $2.36. Revenue also exceeded projections, coming in at $7.3 billion compared to the anticipated $7.22 billion. Despite these strong earnings and revenue figures, the company’s stock experienced a decline in both regular and aftermarket trading, indicating mixed market reactions. In a separate development, Summit Insights downgraded Applied Materials’ stock rating from Buy to Hold. The downgrade was attributed to concerns over U.S. export restrictions to China and potential excess capacity issues. These recent developments highlight the complex market environment facing Applied Materials.
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