Applied Materials Presents Larger-Than-Expected Long-Term Opportunity
Written by Emily J. Thompson, Senior Investment Analyst
Updated: 4 days ago
0mins
Source: stocktwits
- Long-Term Opportunity Outlook: B. Riley noted that Applied Materials presents a larger-than-expected long-term opportunity following the 2026 DRAM and Advanced Packaging Master Class event, forecasting semiconductor industry revenue to reach $1 trillion this year, indicating robust market potential.
- Product Portfolio Strength: Wells Fargo emphasized that Applied Materials' deep product portfolio is well-positioned to support semiconductor scaling by delivering co-optimized integrated material solutions, thereby enhancing its competitive edge in the market.
- New Product Launch: On the same day as the event, Applied Materials unveiled a suite of new chipmaking equipment aimed at addressing the “memory wall” created by AI compute demand, pushing the company towards faster and more energy-efficient advanced chips to meet market needs.
- Strong Market Performance: Retail sentiment towards AMAT stock remains bullish, with the stock price more than doubling this year and tripling over the past 12 months, significantly outperforming the S&P 500 and several semiconductor ETFs, showcasing strong investment appeal.
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Analyst Views on AMAT
Wall Street analysts forecast AMAT stock price to fall
22 Analyst Rating
18 Buy
4 Hold
0 Sell
Strong Buy
Current: 694.640
Low
190.00
Averages
288.05
High
425.00
Current: 694.640
Low
190.00
Averages
288.05
High
425.00
About AMAT
Applied Materials, Inc. is a materials engineering solution company. The Company provides equipment, services and software to the semiconductor, display, and related industries. It operates through two segments: Semiconductor Systems and Applied Global Services (AGS). The Semiconductor Systems segment includes semiconductor capital equipment to enable materials engineering steps including etch, rapid thermal processing, deposition, chemical mechanical planarization, metrology and inspection, wafer packaging, and ion implantation. The AGS segment provides integrated solutions to optimize equipment and fab performance and productivity, including services, spares and factory automation software for semiconductor and other products. Its products include personal computing devices, mobile phones, artificial intelligence (AI) and data center servers, automobiles, connected devices, industrial applications and consumer electronics.
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.
KeyBanc Optimistic About AMAT's Future Performance
- Optimistic Earnings Outlook: KeyBanc anticipates that Applied Materials (AMAT) will report Q3 earnings of $3.38 per share on approximately $9 billion in revenue, with potential stock price increases contingent on beating these expectations, while any disappointments could lead to volatility.
- Market Event Support: The recent 2026 DRAM and Advanced Packaging Master Class hosted by AMAT reaffirmed the company's strong position in the semiconductor industry, forecasting industry revenue to reach $1 trillion, which enhances confidence in its long-term investment opportunities.
- Positive Retail Sentiment: Retail sentiment towards AMAT remains bullish, with the stock more than tripling over the past year, significantly outperforming the S&P 500 and other semiconductor ETFs, indicating strong market confidence in its future growth.
- Price Target Increase: KeyBanc raised its price target for AMAT by $200 to $750, suggesting about a 20% upside from last Friday's closing price, reflecting the market's positive expectations for the company's future performance.
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- Optimistic Earnings Outlook: KeyBanc anticipates that Applied Materials (AMAT) will report Q3 earnings of $3.38 per share on approximately $9 billion in revenue, with potential stock price increases contingent on beating these expectations, while any disappointments could lead to volatility.
- Market Event Support: The recent 2026 DRAM and Advanced Packaging Master Class hosted by AMAT reaffirmed the company's strong position in the semiconductor industry, forecasting industry revenue to reach $1 trillion, which enhances confidence in its long-term investment opportunities.
- Positive Retail Sentiment: Retail sentiment towards AMAT remains bullish, with the stock more than tripling over the past year, significantly outperforming the S&P 500 and other semiconductor ETFs, indicating strong market confidence in its future growth.
- Price Target Increase: KeyBanc raised its price target for AMAT by $200 to $750, suggesting about a 20% upside from last Friday's closing price, reflecting the market's positive expectations for the company's future performance.
See More
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- Burry's Short Position: Notable investor Michael Burry has shorted Tesla at $416.22, despite expectations of Q2 deliveries reaching 410,000 vehicles, surpassing Wall Street's consensus of 406,000, indicating ongoing concerns about the company's valuation.
- Rising Delivery Expectations: Future Fund's Gary Black anticipates a 7% year-over-year increase in Tesla's Q2 deliveries, marking the second consecutive year of delivery growth, although he remains cautious about long-term prospects due to intensifying competition and declining earnings estimates.
- Increased Short Interest: Tesla's short interest is currently around 2% of its float, the highest level in five months, reflecting market divergence regarding its future performance, particularly influenced by bearish sentiments from investors like Burry.
- Retail Investor Sentiment: Despite the prevailing bearish sentiment, retail investors on Stocktwits remain optimistic about Tesla, with some users predicting further price increases, indicating that confidence in Tesla's future performance persists among retail traders.
See More
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- Tech Sector Leadership: The Nasdaq 100 rose almost 20%, while the Nasdaq Composite gained nearly 13%, reflecting sustained growth in the tech sector and investor confidence in innovative companies, which may drive future investment inflows.
- Analyst Stock Picks: Morgan Stanley's recommendation of Applied Materials saw its stock rise 180% in 2026, while Bank of America's pick of Lam Research increased by 153%, showcasing strong analyst confidence that could influence investor decisions.
- Fuel Price Challenges: The national average gasoline price in the U.S. stands at $3.8470 per gallon, with President Trump aiming to reduce it to $2.50, although facing numerous challenges, this goal could impact energy stocks' performance and market expectations.
See More
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- Labor Market Resilience: The May JOLTS job openings unexpectedly rose by 9,000 to a two-year high of 7.594 million, surpassing expectations of 7.296 million, indicating a robust U.S. labor market that could influence Federal Reserve policy decisions.
- Positive Global Economic Signals: China's June manufacturing PMI increased to 50.3, exceeding expectations of 50.1, suggesting potential for global economic recovery and bolstering market confidence in future growth prospects.
- Oil Price Volatility and Geopolitics: WTI crude oil prices fell over 1% amid escalating tensions in the Middle East, with markets closely monitoring U.S.-Iran negotiations, as energy supply levels return to pre-war norms, potentially impacting future oil price trends.
See More
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- Shorting Caterpillar: Renowned investor Michael Burry revealed in his Tuesday SubStack post that he has shorted Caterpillar shares at $1,060.98, believing the construction equipment maker has become one of the most overvalued beneficiaries of the AI investment boom, indicating his bearish outlook on the market.
- Surging Stock Context: Caterpillar's stock surged 86% in the first half of 2026, making it one of the best performers in the S&P 500, as investors embraced it as a proxy for global AI infrastructure development; however, Burry argues that this inflated valuation is unsustainable.
- Valuation Warning: Burry highlighted that Caterpillar's price-to-sales ratio has reached its highest level in at least three decades, coinciding with record-high stock prices, raising concerns about the company's future performance and suggesting potential market correction risks.
- Semiconductor Sector Concerns: He also expressed worries about semiconductor valuations, noting that the Philadelphia Semiconductor Index is trading about 65% above its 200-day moving average, a level previously seen only during the dot-com bubble in 2000, indicating possible bubble risks in the current market.
See More
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- Semiconductor Sector Surge: The Philadelphia Semiconductor Index soared over 80% in Q2, driven by a surge in AI computing demand, highlighting strong market interest in semiconductors, while Nvidia's stock only gained about 12%, failing to keep pace with industry growth.
- Intensifying Competition Impact: Nvidia faces competitive pressure from major clients like Google and Amazon, who are developing their own AI chips, leading to diminished investor confidence in Nvidia's future growth and potentially impacting its market share and profitability.
- Insufficient Buyback Plans: Despite Nvidia's plan to repurchase $80 billion in stock in FY2025, analysts argue this is inadequate and recommend the company adopt a more aggressive buyback strategy similar to Apple's to enhance earnings per share and shareholder returns.
- Increasing R&D Investments: Nvidia's R&D spending reached $13.65 billion in FY2024, a 45% increase year-over-year, yet market expectations for future growth remain clouded by competition and market dynamics, necessitating buybacks to bolster investor confidence.
See More
