Cantor Fitzgerald Reiterates Overweight Rating on Applied Materials

Cantor Fitzgerald analyst C.J. Muse reiterated an Overweight rating and $575.00 price target on Applied Materials (NASDAQ: AMAT).

“At a high level, management believes we are still in the very early innings of the AI trade, with AI driving tremendous compute demand as well as the need for further innovation, with a particular focus on materials and full-system solutions (including AP).

Moreover, internal math at Applied indicates Agentic AI and greater CPU/DRAM are likely ~20% accretive to overall WFE (this is a big # if indeed accurate and absolutely supportive of our $250-300B WFE estimate into the 2029/30 time frame).

To this end, mgmt. has doubled capacity (supporting $10B/Q semi revs or ~$180-200B WFE run-rate) and remains laser-focused on its supply chain, and working closely with customers to 8-quarter order book and conversations around customer needs beyond 24 months.

Internally, management is squarely focused on driving topline growth, operating leverage, and returning excess FCF to shareholders.

Another clear focus from today is co-innovation at the EPIC center with key customers, enabling AMAT to be designed into new product cycles earlier, driving both revenue and gross profit growth.

Lastly, AI is helping drive an increase in both output and performance in AGS, allowing the company to deliver more revenue per tool and driving some of the strength behind the recent raise in the long-term guidance.

All-in, we reiterate our Overweight rating and $575 price target and Applied Materials remains a TOP PICK.”

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