TD Cowen has raised its price target on Applied Materials Inc. (NASDAQ:AMAT) to $450.00 from $315.00 while retaining a Buy rating on the semiconductor equipment maker's shares. The new target equals the highest analyst projection currently on the stock as the shares trade around $368.64, up from a prior close of $339.88. Third-party research available through InvestingPro flags the stock as appearing overvalued relative to its Fair Value.
The research note cited Applied Materials' positioning to benefit from what the firm and Lam Research have each implied is roughly 20% semiconductor system growth in calendar year 2026. TD Cowen framed this outlook as an important underpinning for Applied Materials, which produced $28.37 billion in revenue over the last twelve months.
TD Cowen also observed that the roughly 20% growth implication sits above the projections coming from peers ASML and KLA Corporation. That disconnect prompted the firm to flag a question investors will be watching closely - whether the broader wafer fabrication equipment (WFE) market will expand by more than 20% in 2026, or whether the more optimistic figures reflect relative exposure and share gains for specific vendors.
In its note, the analyst emphasized technical market dynamics that could support stronger demand for Applied Materials' systems. Specifically, TD Cowen pointed to increasing deposition and etch intensity associated with DRAM nodes operating at 1-gamma and to the gate-all-around (GAA) transition in foundry processes as potential growth drivers for the company's equipment portfolio.
TD Cowen's market analysis estimates that Applied Materials together with Lam Research account for approximately 30% of the global wafer fabrication equipment market. The firm also highlighted valuation and scale metrics for Applied Materials: a market capitalization of $290.4 billion and a price-to-earnings ratio of 41.76, positioning the stock at a premium relative to some peers.
InvestingPro's Pro Research Report contains more than 20 additional insights about Applied Materials, including assessments of its financial health and growth prospects, the note said.
Applied Materials' most recent quarterly results added context to the bullish analyst reactions. For fiscal first quarter 2026, the company reported earnings per share of $2.38, topping the consensus forecast of $2.21. TD Cowen and other firms cited the beat as evidence of a healthy WFE backdrop and favorable secular technology trends supporting demand.
Market responses from other brokerage houses followed the quarterly report. RBC Capital lifted its price target to $430 while maintaining an Outperform rating. Needham raised its target to $440, characterizing the results as a "beat-and-raise" quarter that many investors had been anticipating. Craig-Hallum upgraded its rating on the stock from Hold to Buy, pointing to robust growth expectations in semiconductor equipment driven in part by AI demand. Summit Insights likewise upgraded Applied Materials to Buy, forecasting meaningful spending associated with technology transitions spanning AI, smartphones, personal computers and the Internet of Things.
Collectively, these analyst moves and the company's recent financials portray a favorable near-term outlook for Applied Materials, with several firms projecting systems revenue growth to exceed 20% in calendar year 2026. At the same time, TD Cowen's commentary reiterates that investor attention will likely focus on whether this expected growth represents broad market expansion or a capture of share by particular vendors.
Key data points in TD Cowen's assessment remain straightforward: the raised $450 target, revenue of $28.37 billion over the last twelve months, the approximately 20% systems growth implication for 2026 mentioned by Applied Materials and Lam Research, and the combined ~30% WFE market share for Applied Materials and Lam Research. Those figures sit alongside valuation indicators - $290.4 billion market cap and a 41.76 P/E - which underline why some observers describe the stock as trading at a premium.
Investors weighing Applied Materials will need to balance the company's exposure to secular technology spending and intensifying process requirements against the premium valuation assigned by the market and third-party fair-value assessments.