Craig-Hallum raised its recommendation on Applied Materials (NASDAQ:AMAT) from Hold to Buy and increased the firm’s price target to $450.00 on Friday. The new target implies roughly 24% upside relative to the cited current share price of $362.36, with the stock already trading close to its 52-week high and delivering near an 80% return over the past year.
The upgrade rests on Craig-Hallum’s view that semiconductor equipment demand will grow by more than 20% in calendar year 2026, with expansion concentrated in the second half of that year and extending into 2027. That equipment-growth projection is materially stronger than the revenue trajectory Applied Materials itself has presented for fiscal 2026 - a 2% increase, according to InvestingPro data.
Craig-Hallum also highlighted a revision in Applied Materials’ industry assumptions. Applied now expects global semiconductor revenue to hit $1 trillion in 2026, a horizon that the company previously anticipated would not be reached until 2030. The earlier timing for a $1 trillion market signals faster-than-previously-expected industry expansion, according to the research note.
The analyst upgrade was driven by what Craig-Hallum described as increased customer visibility around sustained demand for AI-specific technologies - namely advanced node logic chips, high bandwidth memory (HBM) and advanced packaging solutions. The firm expects AI-driven demand dynamics to persist for an extended period, supporting elevated levels of equipment spending.
As part of its analysis, Craig-Hallum pointed to shifts in wafer start composition. The firm projects that wafer starts for data center applications will soon surpass those for personal computers, and that data center wafer starts are forecast to overtake smartphone wafer starts by 2029. Those trends are used to illustrate the reallocation of semiconductor production capacity toward AI-centric chips and memory.
Applied Materials’ own operating results provided context for the analyst activity. The company reported fiscal first-quarter 2026 earnings per share of $2.38, ahead of a $2.21 projection. Despite the beat, the stock moved lower in after-hours trading following the announcement.
Other broker actions reflected a more optimistic tone after the quarter. Needham raised its price target on Applied Materials from $390 to $440 while keeping a Buy rating, noting the quarterly results as a significant positive. Summit Insights also upgraded the company from Hold to Buy, citing expectations that technology transitions across artificial intelligence, smartphones, PCs and the Internet of Things will underpin higher spending in coming years.
Taken together, the institutional moves - Craig-Hallum’s upgrade and the revised targets and ratings from peers - underscore a shift in how some analysts are positioning Applied Materials amid accelerating AI-related investment and changing end-market wafer demand.
Key points
- Craig-Hallum upgraded Applied Materials to Buy and set a $450 price target, implying ~24% upside from the cited $362.36 share price.
- Craig-Hallum projects semiconductor equipment growth above 20% in calendar 2026, with momentum weighted to H2 2026 and continuing into 2027, outpacing Applied Materials’ fiscal 2026 revenue guide of 2%.
- Other broker actions include Needham raising its target to $440 and Summit Insights upgrading to Buy, both citing stronger spending tied to AI and technology transitions.
Risks and uncertainties
- The equipment growth outlook from Craig-Hallum exceeds Applied Materials’ own fiscal 2026 revenue guidance - a divergence that highlights uncertainty about the timing and magnitude of end-market recovery or acceleration; this impacts semiconductor equipment suppliers and related capital spending cycles.
- Despite an EPS beat in fiscal Q1 2026, Applied Materials’ stock fell in after-hours trading, signaling market sensitivity to execution details and investor expectations; this volatility affects equity investors and market participants monitoring technology hardware earnings.