New York, Jan 11, 2026, 15:21 EST — Market closed
- Applied Materials jumped 6.9% on Friday, riding a wave of gains in chip stocks ahead of the weekend
- Goldman Sachs and Mizuho raised their price targets, citing strength in memory and AI-driven capital expenditure
- The spotlight now turns to Feb. 12 earnings, highlighting order trends, China exposure, and the 2026 outlook
Applied Materials, Inc. shares ended Friday up 6.9% at $301.18. The chip-equipment maker saw volatile trading, swinging between $280 and $302.70 before heading into Monday’s open.
This matters since Applied offers one of the clearest signals on semiconductor capital spending — the budgets chipmakers allocate for new equipment — and investors are once again re-evaluating those 2026 budgets, trying to untangle AI-driven demand from the broader cycle.
Friday’s rally extended across chip stocks following a weaker-than-expected U.S. jobs report that left rate-cut hopes mostly unchanged. The Philadelphia SE Semiconductor index even hit a record high. “On the overall AI theme, investors are getting granular and picking the winners and losers,” said Zachary Hill, head of portfolio management at Horizon Investments. 1
Goldman Sachs analyst James Schneider raised his price target on Applied to $310 from $250, maintaining a Buy rating. He cited stronger demand for etch and deposition tools—key processes that shape and coat silicon wafers. Schneider also highlighted tight DRAM and NAND markets, the main memory chip types, as a tailwind for equipment orders through 2026-2027. He added that China risk now appears more “normalized” compared to peers. 2
Mizuho’s Vijay Rakesh bumped his price target to $275 from $245, keeping an Outperform rating intact. He sees room for semiconductor and capital equipment stocks to climb in 2026, though gains might be smaller than those expected in 2025. His top picks for the year include AI accelerators and wafer fab equipment—the high-cost tools key to chip production. 3
Applied supplies deposition and etch equipment, along with inspection and services, for cutting-edge logic chips, memory, and “advanced packaging”—the techniques that stack and link chips more densely to boost performance.
China continues to be the key variable for the stock. Applied Materials warned that stricter U.S. export rules will probably weigh on its China-bound tool sales in 2026. Still, rising demand from AI-related memory and other areas should cushion some of the blow. 4
Industry forecasters are raising their medium-term outlook. SEMI projected in December that global chipmaking equipment sales will climb roughly 9% to $126 billion in 2026, then jump another 7.3% to $135 billion in 2027. The growth comes as chipmakers ramp up capacity for AI-driven logic and memory. 5
Yet the upside isn’t straightforward. A slowdown in memory spending or delays from customers following a surge in 2025 orders could hit tool makers fast. On top of that, tougher U.S. export rules would bring fresh uncertainty, especially affecting service revenue and exposure to China.
Applied’s next quarterly report is due Feb. 12 after the close. Traders will be focused on order momentum, any comments related to China, and potential changes to 2026 spending plans.
