On Tuesday, Wolfe Research reiterated its Outperform rating on shares of Applied Materials (NASDAQ:AMAT), with a price target of $250.00. The firm's positive stance is based on the potential industry-wide adoption of high-NA EUV technology by the calendar years 2025/26, which is expected to be a smoother transition than previous technological advancements.
Applied Materials recently discussed its pattern shaping technology, Sculpta, at the SPIE conference, signaling modest top line growth over the next two years and showcasing the company's efforts to outpace the industry's growth.
The technology-focused panel that Applied Materials hosted on Monday highlighted the Sculpta patterning tool's role in the semiconductor ecosystem. The company asserts that this technology is complementary to existing lithography solutions rather than being in direct competition.
This distinction is crucial as it positions Applied Materials to capitalize on the increasing complexity in process tool integration, which could provide a competitive edge due to their comprehensive product line.
The discussion at the SPIE conference did not center on demand trends; however, sentiments from semiconductor capital equipment (SCE) companies have been trending positive. Earlier in February, at the Wolfe's Semiconductor conference, there was a noticeable optimism regarding the sector's outlook heading into the calendar year 2025.
This optimism is further supported by the stability in the Chinese market and early signs of improvement in the DRAM sector.
Applied Materials' current bookings have not yet reflected orders for DRAM capacity expansion or for logic orders related to TSMC's N2 node ramp-up. However, Wolfe Research is confident that such orders will materialize, potentially driving the company's estimates higher.
This confidence stems from the belief that the emerging technology and market conditions will favor Applied Materials' growth and market position.
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