Applied Materials stock price target raised to $215 from $180 at Stifel

Investing.com - Stifel raised its price target on Applied Materials (NASDAQ:AMAT) to $215.00 from $180.00 on Monday, while maintaining a Buy rating on the semiconductor equipment manufacturer’s stock. The company’s stock has shown remarkable momentum, delivering a 45.68% return over the past six months, with a current market capitalization of $167.26 billion.

The research firm views Applied Materials as a high quality, lower-beta holding in the semiconductor and technology sector, noting the company’s strong product portfolio positions it well to address semiconductor customers’ future technology roadmap challenges. According to InvestingPro analysis, AMAT is a prominent player in the Semiconductors & Semiconductor Equipment industry, maintaining robust financial health with a "GOOD" overall score.

Stifel highlighted that Applied Materials has more pathways to serviceable available market (SAM) expansion and solutions engineering compared to many of its peers, particularly important in the current climate where additive or external mergers and acquisitions in the sector are limited. With a healthy gross profit margin of 48.5% and strong cash flows, the company is well-positioned for market expansion. Discover more insights about AMAT’s growth potential in the comprehensive Pro Research Report, available exclusively on InvestingPro.

The firm believes Applied Materials is well positioned to establish higher peak revenue and profitability levels through the upcoming industry upcycle, warranting a higher multiple.

Stifel also noted that Applied Materials has demonstrated improved financial performance across the business cycle, particularly during the recent industry downturn.

In other recent news, Applied Materials has introduced three new semiconductor manufacturing systems designed to enhance the performance of advanced chips used in AI computing. Among these is the Kinex Bonding system, which integrates critical hybrid bonding process steps to improve chip performance and reduce power consumption. Meanwhile, the company disclosed that recent changes in U.S. export controls will negatively impact its business in China, leading to an estimated $110 million reduction in net revenue for the fourth quarter of fiscal 2025 and about $600 million for fiscal 2026.

Despite these challenges, Stifel maintains a Buy rating on the stock, while Cantor Fitzgerald reiterated its Overweight rating with a $225.00 price target. Cantor Fitzgerald downplayed the financial impact of the export restrictions, estimating only a 2% effect on fiscal year 2026 revenues. Additionally, Bernstein SocGen Group continues to rate the stock as Outperform, maintaining a $195.00 price target despite the regulatory hurdles. These developments reflect the ongoing adjustments and strategic maneuvers by Applied Materials in response to evolving market conditions and regulatory landscapes.

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