UBS Lowers Applied Materials Price Target to $675

UBS analyst Timothy Arcuri lowered the price target on Applied Materials (NASDAQ: AMAT) to $675 (from $705) while maintaining a Buy rating on August 14, 2026.

“AMAT guided spot in-line w/our preview – but below some of the unrealistic (in our view) pre-call investor bogeys – and the gross margin guidance/commentary was a bit punk considering AMAT’s narrative around “value based pricing” and LRCX explicitly raising GM targets.

This was always going to be a bit of a tough comp coming off LRCX’s report, but most of this is just noise and the most important comment on this call was that AMAT is doubling systems output capacity by C2028 (LRCX also announced a significant mfg capacity expansion post close) with more capacity expansion already in the works beyond this timeframe.

While not revenue guidance per se, this is broadly consistent w/our model of ~$14B/Q in (systems) revenue exiting C2028 which would push EPS very close to $30 – and likely still moving higher from there as we believe WFE will easily eclipse $300B by C2029.

We have found that alpha in SPE is mostly determined by relative growth and while AMAT is not guiding Jan Q revenue, even if we assume a big deceleration to mid-single digit Q/Q growth in systems (which is more conservative than what we see in the supply chain), systems are growing ~42% this year amid WFE up in the high-30%s.

Ergo, AMAT is re-gaining ~200bps of share this year and with DRAM/foundry likely accelerating next year, AMAT should continue to gain WFE share.

Net, we just slightly trim C2027/2028 as the margin commentary here makes us wonder if we were a bit over-zealous with C2027 now ~$22.80 and C2028 now ~ $29.60.

Our PT goes to $675 (from $705), and rating remains Buy.”

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