RBC Capital Raises Applied Materials Price Target to $500

RBC Capital analyst Srini Pajjuri raised the price target on Applied Materials (NASDAQ: AMAT) to $500.00 (from $430.00) while maintaining an Outperform rating.

“Expecting Strong Results On DRAM Strength; We expect a beat/raise consistent with recent results from peers LRCX/TOELY.

AMAT management typically doesn’t offer explicit WFE projections, but previously guided for 20%+ growth in its Systems business in CY26, which we believe is tracking ahead.

NT trends are in AMAT’s favor given its strong presence in DRAM/HBM and Advanced Logic.

In addition, we won’t be surprised if ICAPS starts to show signs of recovery given improving Analog IC demand trends.

Looking ahead, we expect WFE to grow at a double-digit pace for the next 2-3 years driven by GenAI, extreme tightness in DRAM, and growing competition in Advanced Foundry.

Valuation is at >10% discount to peers, which makes AMAT particularly attractive, in our view. Reiterate Outperform.”

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