Applied Materials stock rating reaffirmed at Buy by Stifel ahead of earnings

Investing.com - Stifel has maintained its Buy rating and $195.00 price target on Applied Materials (NASDAQ:AMAT), a $152.5 billion semiconductor equipment giant with a solid financial health score of "GOOD" according to InvestingPro, ahead of the company’s fiscal third-quarter earnings report scheduled for Thursday.

The investment firm expects Applied Materials to meet or slightly exceed revenue and earnings per share estimates for the quarter ending in July, while guiding fiscal fourth-quarter (October) results to be flat to higher sequentially. The company has demonstrated strong profitability with a 48.1% gross margin and 5.99% revenue growth over the last twelve months.

Stifel projects a flat-to-modestly higher sequential revenue trajectory, reflecting year-over-year strength in advanced foundry segments offset by digestion in mature/ICAPS investment areas.

The firm believes Applied Materials remains well-positioned to capture an above-average share of leading-edge GAA and DRAM/HBM investment, though it notes DRAM investment in Korea has moderated toward year-end, potentially offset by improved spending from China.

Analysis of Chinese import data indicates semiconductor equipment imports are down year-to-date through June, according to Stifel’s research.

In other recent news, Morgan Stanley has maintained its Equalweight rating on Applied Materials, projecting the company’s October quarter revenue to increase by low single digits to approximately $7.4-7.5 billion. This forecast surpasses both Morgan Stanley’s previous estimate of flat growth and the Street consensus of 1.5% growth. Meanwhile, Goldman Sachs has reiterated its Buy rating for Applied Materials with a price target of $225, citing the company’s strong position in deposition and etch technologies. Goldman Sachs also initiated coverage on Applied Materials with the same Buy rating and price target, highlighting the company’s advantage in the semiconductor industry’s shift toward 3D architectures.

Furthermore, the sector has faced some challenges, as seen when U.S. semiconductor equipment makers, including Applied Materials, experienced a drop in shares following ASML’s warning about potential growth uncertainty in 2026 due to U.S. tariffs. Despite this, Goldman Sachs remains optimistic about Applied Materials’ ability to outperform industry peers. These developments reflect the dynamic nature of the semiconductor equipment industry and the various factors influencing investor sentiment.

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