Deutsche Bank has revised its investment stance on Applied Materials (NASDAQ: AMAT), increasing its rating to Buy from the previous Hold designation. Additionally, the bank elevated its price target for the semiconductor equipment firm from $275 to $390. Currently, Applied Materials shares are priced at $318.79, translating to a significant market capitalization of roughly $252.78 billion.
This rating upgrade follows Deutsche Bank's optimistic outlook on the wafer fabrication equipment (WFE) market environment moving into 2026 and 2027. The assessment corresponds with the company's share price nearing its 52-week peak of $333.03, reflecting a remarkable one-year return of approximately 68.84%, according to InvestingPro data.
Analyst Melissa Weathers from Deutsche Bank has adjusted her earnings forecasts for Applied Materials upward, positioning her projections about 10% above the Street consensus. She also acknowledged potential further upside risks that could enhance the stock’s value.
The updated analysis points out that Applied Materials currently trades at a valuation discount compared to its semiconductor equipment industry peers—a discount Deutsche Bank considers excessive. The bank anticipates this valuation gap to contract over time as market perceptions align.
The new price target of $390 signals Deutsche Bank's strong belief in Applied Materials’ capacity to capitalize on growth opportunities within the semiconductor equipment sector.
Additional positive developments include Applied Materials' recent declaration of a quarterly cash dividend of $0.46 per share, marking the company's eighth consecutive year of dividend increases. This sustained dividend growth underscores the firm's financial health and commitment to returning value to shareholders.
Other financial institutions have also expressed favorable views:
- KeyBanc Capital Markets increased its price objective to $380, emphasizing Applied Materials’ diversified supplier base and the potential advantages stemming from emerging chip architectures.
- RBC Capital initiated coverage with an Outperform rating and set a $385 target, noting the company’s historical performance relative to the SOX (Semiconductor Index) and acknowledging headwinds related to geopolitical factors such as challenges in China.
- Stifel raised its price target to $340, highlighting the firm's strong product lineup and its readiness to confront future technological advancements.
- TD Cowen set a new price target of $315, spotlighting Applied Materials' solid positioning in DRAM memory production technologies and cutting-edge foundry sectors.
Collectively, these analyst actions reflect a broadly positive perspective on Applied Materials’ strategic positioning and product offerings in the evolving semiconductor market.