Applied Materials and Advanced Energy Upgraded Amid Strong Semiconductor Equipment Spending
Written by Emily J. Thompson, Senior Investment Analyst
Updated: Jan 12 2026
0mins
Should l Buy AEIS?
Source: seekingalpha
- Industry Spending Outlook: Analyst Mehdi Hosseini highlighted that the semiconductor capital equipment sector is expected to reach $120 billion in spending, and while supply chain bottlenecks make the path to $150 billion volatile, the overall trend remains strong, indicating industry resilience.
- Company Earnings Forecast: Hosseini anticipates that company-specific earnings for Applied Materials and Advanced Energy will grow at a compound annual growth rate exceeding 25%, with the cycle extending for several years, providing investors with confidence in long-term growth.
- Rating and Price Target Adjustments: Applied Materials' rating was upgraded from Neutral to Positive, with the price target raised from $180 to $400, while Advanced Energy's rating was also upgraded to Positive, with the target price increased from $190 to $300, reflecting the analyst's optimism about both companies' future performance.
- Free Cash Flow Support: The analyst noted that semiconductor equipment companies are achieving double-digit free cash flow margins, which not only supports an uplift in valuation multiples but also indicates a healthy financial status in the industry, further attracting investor interest.
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Analyst Views on AEIS
Wall Street analysts forecast AEIS stock price to fall over the next 12 months. According to Wall Street analysts, the average 1-year price target for AEIS is 234.38 USD with a low forecast of 190.00 USD and a high forecast of 300.00 USD. However, analyst price targets are subjective and often lag stock prices, so investors should focus on the objective reasons behind analyst rating changes, which better reflect the company's fundamentals.
9 Analyst Rating
8 Buy
1 Hold
0 Sell
Strong Buy
Current: 273.260
Low
190.00
Averages
234.38
High
300.00
Current: 273.260
Low
190.00
Averages
234.38
High
300.00
About AEIS
Advanced Energy Industries, Inc. provides engineered, critical, precision power conversion, measurement, and control solutions to its customers. The Company designs, manufactures, sells, and supports precision power products that transform, refine, and modify the raw electrical power coming from either the utility or the building facility and convert it into various types of controllable, usable power that is predictable, repeatable, and customizable to meet the necessary requirements for powering a range of complex equipment. The Company's precision power products and solutions are designed to enable new process technologies, improve productivity, and provide critical power capabilities for its customers. Its support services include warranty and non-warranty repair services, calibration, upgrades, and refurbishments of its products. The Company’s products are sold in the Semiconductor Equipment, Industrial and Medical, Data Center Computing, and Telecom and Networking markets.
About the author
Emily J. Thompson
Emily J. Thompson, a Chartered Financial Analyst (CFA) with 12 years in investment research, graduated with honors from the Wharton School. Specializing in industrial and technology stocks, she provides in-depth analysis for Intellectia’s earnings and market brief reports.
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- Industry Spending Outlook: Analyst Mehdi Hosseini highlighted that the semiconductor capital equipment sector is expected to reach $120 billion in spending, and while supply chain bottlenecks make the path to $150 billion volatile, the overall trend remains strong, indicating industry resilience.
- Company Earnings Forecast: Hosseini anticipates that company-specific earnings for Applied Materials and Advanced Energy will grow at a compound annual growth rate exceeding 25%, with the cycle extending for several years, providing investors with confidence in long-term growth.
- Rating and Price Target Adjustments: Applied Materials' rating was upgraded from Neutral to Positive, with the price target raised from $180 to $400, while Advanced Energy's rating was also upgraded to Positive, with the target price increased from $190 to $300, reflecting the analyst's optimism about both companies' future performance.
- Free Cash Flow Support: The analyst noted that semiconductor equipment companies are achieving double-digit free cash flow margins, which not only supports an uplift in valuation multiples but also indicates a healthy financial status in the industry, further attracting investor interest.
See More
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- Dividend Safety Ratings: Arcosa (ACA) tops the list with an A+ dividend safety grade, demonstrating its strong ability to maintain dividend payments amid unpredictable market conditions, appealing to investors seeking stable income.
- Sector Diversity: The list showcases notable diversity across sectors such as Construction and Engineering, Electronic Equipment and Instruments, Agricultural and Farm Machinery, and Asset Management, indicating the investment potential of mid-cap stocks in various economic environments and enhancing portfolio diversification.
- Rating Criteria: The dividend safety grade evaluates not only the current dividend yield but also multiple financial factors to assess a company's ability to sustain dividends through various market conditions, with a grading scale from A+ to F providing clear buy or sell signals for investors.
- Investment Opportunities: All ten stocks maintain an A+ rating, representing the best options for investors seeking reliable dividend payments, particularly in the context of increasing market volatility, where the stability of these stocks becomes crucial.
See More
Advanced Energy Declares Quarterly Dividend
- Quarterly Dividend Announcement: Advanced Energy (AEIS) has declared a quarterly dividend of $0.10 per share, consistent with previous distributions, demonstrating the company's ongoing ability to maintain stable cash flows, which is likely to attract income-seeking investors.
- Dividend Yield: The forward yield of this dividend stands at 0.16%, reflecting the company's shareholder return strategy in the current market environment, aimed at bolstering investor confidence and maintaining shareholder loyalty.
- Payment Schedule: The dividend is payable on March 6, with a record date of February 23 and an ex-dividend date also on February 23, ensuring that shareholders receive their returns promptly, thereby strengthening the relationship between the company and its investors.
- Market Focus: As Advanced Energy is expected to accelerate growth in 2026, market attention towards its future performance is increasing, particularly against the backdrop of a rebound in data center power demand, which could drive the company's stock price higher and attract more investors.
See More
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- Significant Revenue Potential: Credo anticipates generating annual revenues of $4 billion to $5 billion in the long term, with Bank of America estimating earnings power exceeding $10 per share, indicating strong profitability in a rapidly expanding market.
- Stock Price Upside: Credo's shares surged 114% last year and are expected to rise by 245% in 2024, reflecting robust market confidence in its growth prospects, with Bank of America raising its price target to $200, suggesting a 44% upside.
- Strong Industry Demand: With the rebound in AI-driven data center and semiconductor equipment spending, Credo's market outlook is widely regarded as favorable, likely driving sustained growth in the coming years, particularly in complex semiconductor testing and advanced packaging sectors.
See More
KeyBanc Raises Price Targets for AMAT, AEIS, MKSI, Anticipating Strong 2026 Growth
- Semiconductor Sales Outlook: KeyBanc analysts project semiconductor sales will reach $1 trillion by 2026, ahead of previous estimates for 2029-2030, reflecting strong confidence in GPU and data center demand, which could drive stock prices higher for related companies.
- AEI Industries Price Target Increase: AEI Industries' price target was raised from $240 to $280, with analysts noting that the stock's significant rise over the past nine months has been driven by data center demand, and they foresee multiple growth opportunities in the coming years, projecting revenue growth rates of 11% and 10% for 2027 and 2028, respectively.
- Positive Outlook for Applied Materials: Applied Materials' price target was increased from $285 to $380; despite lagging behind peers, analysts believe its diversified supplier status will benefit chip manufacturing, with expectations of low double-digit revenue growth in its services segment for FY27-FY28.
- MKS Growth Potential: MKS' price target was raised from $180 to $250, with analysts optimistic about its free cash flow profile, believing its broad application in advanced packaging and NAND tools will drive revenue and EPS growth in the coming years, particularly amid a cyclical recovery in semiconductor sales.
See More
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- Price Target Cut: Morgan Stanley lowered Kraft Heinz Co (NASDAQ:KHC) price target from $27 to $24, downgrading its rating from Equal-Weight to Underweight, signaling concerns about its market performance.
- Target Price Increase: JP Morgan raised Honeywell International Inc. (NASDAQ:HON) price target from $218 to $255, upgrading its rating from Neutral to Overweight, reflecting confidence in its future growth potential.
See More
Applied Materials and Advanced Energy Upgraded Amid Strong Semiconductor Equipment Spending
- Industry Spending Outlook: Analyst Mehdi Hosseini highlighted that the semiconductor capital equipment sector is expected to reach $120 billion in spending, and while supply chain bottlenecks make the path to $150 billion volatile, the overall trend remains strong, indicating industry resilience.
- Company Earnings Forecast: Hosseini anticipates that company-specific earnings for Applied Materials and Advanced Energy will grow at a compound annual growth rate exceeding 25%, with the cycle extending for several years, providing investors with confidence in long-term growth.
- Rating and Price Target Adjustments: Applied Materials' rating was upgraded from Neutral to Positive, with the price target raised from $180 to $400, while Advanced Energy's rating was also upgraded to Positive, with the target price increased from $190 to $300, reflecting the analyst's optimism about both companies' future performance.
- Free Cash Flow Support: The analyst noted that semiconductor equipment companies are achieving double-digit free cash flow margins, which not only supports an uplift in valuation multiples but also indicates a healthy financial status in the industry, further attracting investor interest.
See More
