RBC Capital has increased its 12-month price target for Applied Materials (NASDAQ:AMAT) to $430 from $385 and kept an Outperform rating on the semiconductor equipment supplier. The firm’s new target implies upside from the stock’s current quote of $362.37, though InvestingPro data noted the shares are trading above their Fair Value and have risen about 80% over the past 12 months.
RBC pointed to Applied Materials’ recent strong results, saying performance was supported by a healthy wafer fabrication equipment - WFE - environment and longer-term secular technology trends. Company management did not provide explicit WFE projections, but they signaled an expectation that Systems revenue will grow by more than 20% in calendar year 2026.
The analyst update reiterated that Applied Materials sits on a sizable revenue base and market capitalization, which RBC cited in context: the company has approximately $28.37 billion in revenue and a market capitalization of about $288.91 billion. Those scale metrics underpinned RBC’s view of the company’s ability to capture demand tied to advanced node and packaging investments.
RBC highlighted Applied Materials’ leadership across several product segments, specifically DRAM/HBM, Advanced Logic and Packaging - CoWoS - and said those positions should allow the firm to benefit from artificial intelligence-driven spending in the semiconductor industry. The firm also addressed concerns about competitive pressure in China, describing worries that Applied Materials is losing share there as "overdone." RBC expects double-digit revenue growth momentum to continue into 2027 even as demand for mature nodes is anticipated to moderate.
RBC’s upgrade to the price target and reiteration of an Outperform rating came amid other analyst moves that reflected a generally constructive tone toward Applied Materials. The company’s first-quarter fiscal 2026 earnings showed earnings per share of $2.38, topping the consensus forecast of $2.21. Despite beating the estimate, the stock fell 3.38% in after-hours trading following the report.
Several brokerages revised their views in the wake of the quarterly results. Craig-Hallum upgraded the shares from Hold to Buy, citing stronger growth expectations for semiconductor equipment particularly in the back half of 2026 and into 2027. Needham raised its price target to $440 from $390 while maintaining a Buy rating and described the recent quarter as a material positive for investors. Summit Insights also moved to a Buy, pointing to anticipated increases in spending across technology transitions including artificial intelligence and the Internet of Things.
Collectively, these actions reflect a positive analyst sentiment around Applied Materials’ near- to medium-term prospects, driven by WFE demand and the company's product positions. At the same time, valuation metrics and short-term market reactions underscore ongoing investor debate about timing and durability of the recovery in equipment spending.
Key points
- RBC raised Applied Materials' price target to $430 from $385 and kept an Outperform rating; current price cited at $362.37 and shares up ~80% over the past year.
- Management expects Systems revenue growth of more than 20% in calendar 2026; company revenue and market capitalization noted at $28.37 billion and $288.91 billion respectively.
- Other broker moves include Craig-Hallum upgrading to Buy, Needham raising its target to $440 with a Buy rating, and Summit Insights upgrading to Buy, reflecting broad analyst optimism tied to AI and IoT-driven spending.
Risks and uncertainties
- Valuation risk - InvestingPro indicates the stock is trading above its Fair Value, suggesting limited margin for error if growth expectations slip; this affects equity investors in the semiconductor equipment sector.
- Demand uncertainty for mature nodes - RBC expects slower demand for mature semiconductor nodes even as it forecasts continued double-digit revenue growth; this dynamic could influence revenue mix and margin outcomes across the semiconductor supply chain.
- Geographic market share concerns - Although RBC called worries about share loss in China "overdone," competitive dynamics in the Chinese market remain a potential source of volatility for the company and the broader equipment industry.