KeyBanc Raises Applied Materials Price Target to $380

KeyBanc analyst Steve Barger raised the price target on Applied Materials (NASDAQ: AMAT) to $380.00 (from $285.00) while maintaining an Overweight rating.

“We are maintaining our OW rating, increasing our FY26-FY28 estimates as reflected in the table below, and we are increasing our price target to $380, which is 28x our FY28 estimate of $13.55. As shown on slide 6, AMAT’s multiple expansion has lagged front-end peers KLAC and LRCX.

We think that more muted expansion is a function of AMAT’s higher exposure to trailing edge nodes for both China and ROW customers. We understand that underperformance but note AMAT is the most diversified supplier and should benefit from increasing deposition and etch intensity as chip architecture at the leading edge (to eventually include DRAM) goes vertical.

It is also the name most exposed to conventional DRAM, arguably the AI-related device facing the most scarcity, which we think at some point should translate into capacity expansion. We also expect AMAT’s Applied Global Services segment should post LDD revenue growth in FY27-FY28 due to customers running the installed base of equipment at high utilization levels.

While we acknowledge the front-end names generally perform as ‘one trade’, we think AMAT should screen better for new money given its relative valuation and integral position in enabling semiconductor manufacturing.”

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