These Applied Materials Analysts Slash Price Targets Despite Strong Q3, Raised FY Outlook on >30% WFE Growth

Shares of Applied Materials Inc. (NASDAQ:AMAT) fell in early trading on Friday, after the company reported its fiscal fourth-quarter results.

Here are some key analyst takeaways:

• Needham analyst Charles Shi reiterated a Buy rating, while cutting the price target from $580 to $470.
• JPMorgan analyst Harlan Sur maintained an Overweight rating, while slashing the price target from $660 to $500.

Check out other analyst stock ratings.

Needham: Applied Materials reported solid quarterly results, with revenue growing 14% sequentially to $10.4 billion, Shi said in a note. Management guided to revenue of $11.1 billion for the current quarter, reflecting 7% sequential growth, he added.

This is expected to be driven by:

• Revenue of Semi Systems growing 9% to $8.7 billion
• Revenue of AGS (Applied Global Services) growing 5% to $2.0 billion.

"For the calendar year, AMAT expects Advanced Packaging revenue to be up 90% YoY (vs. 70% previously) and Process Control revenue to be up 50% YoY (unchanged vs. last quarter)," the analyst wrote. Management projected WFE (Wafer Fab Equipment) growth of +30% in 2027, with the expectation to outperform this number, he further stated.

Applied Materials expects to double its capacity by the end of 2028 to meet growing demand, Shi said. The price target had been lowered due to "continued sector-wide multiple compression," he added.

JPMorgan: Applied Materials delivered a modest beat and its fiscal first-quarter guidance was slightly better than Street estimates, Sur said. The core Semi Systems business continued to drive the company’s strong results, with record revenue of around $8.0 billion, he added.

"Management also sounded particularly constructive on lead times during our callback, noting that it was now almost fully booked for CY27," the analyst wrote.

The broader WFE fundamentals are likely to remain strong into 2027 and 2028, with Applied Materials poised to "greatly benefit given its strengthening order visibility, stronger business mix, and structural GM expansion," Sur added.

The price target had been lowered due to "severe multiple compression in semi cap equipment stocks," he said.

AMAT Price Action: Shares of Applied Materials had declined by 6.78% to $355.12 on Friday.

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