BofA Securities Lowers Applied Materials Price Target to $520

BofA Securities analyst Vivek Arya lowered the price target on Applied Materials (NASDAQ: AMAT) to $520 (from $650) while maintaining a Buy rating.

“AMAT delivered a modest beat/raise with F4Q26 sales/pf-EPS landing +4%/+3% vs. consensus while 1Q27 guide at the midpoint was +2%/+2% vs. cons. Key takeaways: 1) demand environment continues to strengthen as leading-edge logic and DRAM markets remain constrained, driving customers to add capacity and pull in projects with systems sales expected to grow sequentially through FY27,

2) AMAT has ~8 quarters of visibility from top customers (70% of SAM), mainly excluding China,

3) key product areas like advanced packaging and process control are growing 90% YoY and >50% YoY, respectively, in CY26,

4) AMAT plans to double its system output from 4Q26 levels by FY28, providing capacity for ~$64bn sales if demand supports (at ~20% share implies $300bn WFE),

5) mgmt. expects to continue to expand GMs driven by overcoming ramp costs, increasing output, and higher pricing.

We note that ~$38bn CY26E sales implies ~19% in our ~$200bn CY26E WFE, already 1pt of share gain vs. CY25 while mgmt. is still targeting 2 pts of share gain by CY30E, potentially suggesting conservatism (AMAT’s SAM remains ~55% of WFE, ex litho, track etc.).

We reiterate our Buy rating and raise our CY27/28E pf-EPS +2%/+9% but lower our PO to $520 (from $650), now on 20x CY28E PE (`27x prior) following recent semicap multiple compression.”

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