NEW YORK, Jan 14, 2026, 18:43 EST — After-hours
- RBC Capital Markets kicked off coverage of Applied Materials, assigning an Outperform rating and setting a $385 price target
- BofA raised its price target to $350 and maintained a Buy rating
- After-hours, AMAT shares slipped roughly 1% to $301.89
RBC Capital Markets kicked off coverage of Applied Materials (AMAT.O) on Wednesday, assigning an Outperform rating and setting a $385 price target. The firm highlighted a stronger outlook for chipmaking-tool demand. After hours, Applied Materials shares dipped roughly 1% to $301.89. 1
The timing is key as investors shift back into semiconductor capital equipment stocks, betting that spending is expanding beyond the current AI chip bottlenecks. What comes next will hinge less on headlines and more on actual order books — covering memory, logic, and advanced packaging.
China remains a tough wild card. Applied noted that stricter U.S. export rules will limit its reach in the Chinese market, though the company still anticipates a rise in overall tool spending. CFO Brice Hill told investors earlier: “Our customers are indicating to us that wafer fab equipment spending is likely to accelerate beginning in the second half of calendar 2026.” 2
On Tuesday, Bank of America boosted its price target for Applied Materials to $350 from $300, maintaining its Buy rating. The firm cited a “stronger multi-year demand outlook,” improved visibility, and the chance for increased free cash flow in the next cycle. 3
RBC analyst Srini Pajjuri noted that while Applied’s shares outperformed the Philadelphia semiconductor index last year, they lagged behind certain U.S. tool peers. He pointed to challenges from China, weaker demand for older “mature” process nodes, and potential shifts in market share as key factors. Pajjuri expects Applied to grow at least in step with wafer fab equipment spending — the gear chipmakers use to operate fabs — with DRAM memory chips driving notable strength.
The note also highlighted longer-term tech shifts: “backside power” (relocating some power connections to a chip’s rear), hybrid bonding in packaging, and novel transistor designs aimed at boosting performance. These changes usually drive more process steps, tools, and service demand as they roll out.
Applied Materials swung between $304.95 and $297.06 on Wednesday, with roughly 6.5 million shares changing hands. Chip-tool peers also slipped: Lam Research (LRCX.O) dropped roughly 3%, while KLA (KLAC.O) dipped about 0.5% late in the session.
There’s a downside risk, though. Should export licensing clamp down again, or if memory and foundry clients pull back after a strong start to the year, price targets won’t hold much weight. These stocks can dive quickly when orders falter.
As regular trading wraps, focus shifts to Thursday’s open, with eyes on whether buyers jump in following the two bullish calls or dismiss them as too little, too late. Traders will also keep an eye on memory spending, where Applied has been pushing hard to prove it holds genuine leverage.
Applied hasn’t set a firm date yet, but earnings are likely due around Feb. 12, according to MarketBeat. Investors will be watching closely for updates on order trends, China exposure, and if management anticipates a smoother spending increase in 2026. 4
