Needham has raised its price objective on Applied Materials (NASDAQ:AMAT) to $440.00 from $390.00, maintaining a Buy rating on the semiconductor equipment supplier after the company's most recent quarterly performance.
The research firm described the quarterly results as "an unmistakable beat-and-raise quarter that investors have dearly missed for quite some time." Needham pointed to Applied Materials' outlook for calendar year 2026 semiconductor equipment revenue - management guided growth of over 20% - and said that metric surpassed expectations established by industry peers who reported earlier.
Company management signaled that strong wafer fabrication equipment, or WFE, growth should extend into calendar year 2027. According to the statements cited by analysts, that continuation of WFE expansion is expected to be driven primarily by spending in leading-edge logic, DRAM/HBM and advanced packaging technologies.
In its commentary, Needham emphasized Applied Materials' market position in those areas, referring to the company as the "#1 process equipment supplier" in the growth segments noted above. The research firm characterized the quarter as "the narrative-changing quarter that we have been waiting for." These remarks were part of the rationale for the higher price target and the affirmation of a Buy rating.
The company also reported first-quarter fiscal 2026 earnings that exceeded expectations. Applied Materials posted earnings per share of $2.38 compared with forecasts of $2.21. Despite the upside on the earnings line, the stock traded lower in after-hours session.
Separately, Summit Insights upgraded Applied Materials' rating from Hold to Buy. Summit Insights framed the upgrade around expectations that technological advances across artificial intelligence, smartphones, personal computers and the Internet of Things will support increased capital expenditure in logic/foundry and DRAM by 2026.
Taken together, the analyst actions, the stronger-than-expected earnings and the elevated revenue guidance for 2026 represent meaningful recent activity around Applied Materials. The company’s guidance and management commentary on persistent WFE demand into 2027 form the basis for the changed analyst outlooks.
Clear summary
Needham raised its Applied Materials price target to $440 from $390 and kept a Buy rating after a quarterly beat-and-raise report, with management guiding semiconductor equipment revenue growth of over 20% for calendar year 2026 and signalling sustained WFE growth into 2027. Applied beat EPS expectations for Q1 fiscal 2026 but the stock fell in after-hours trading. Summit Insights also upgraded the stock to Buy, citing expected technology-driven capex increases by 2026.