New York, Jan 18, 2026, 15:38 EST — Market closed.
- Applied Materials shares ended the day 2.5% higher, closing at $327.01.
- KeyBanc bumped up its price target to $380 while maintaining an Overweight rating.
- U.S. markets remain closed Monday as attention turns to upcoming chip spending data and earnings reports.
Applied Materials shares closed Friday 2.5% higher at $327.01, following a wider rally in chip-equipment stocks fueled by upbeat research notes and signs of increased spending from leading chipmakers.
This shift is crucial as investors ramp up exposure to semiconductor capital equipment, betting on a stronger order cycle in 2026. Analysts say the sector’s valuations remain behind other parts of the rally. Put simply: when chipmakers boost factory spending, toolmakers tend to see the impact first.
KeyBanc Capital Markets raised its price target on Applied Materials to $380 from $285 on Friday, maintaining an Overweight rating. The firm highlighted Applied’s wide reach across the tool chain and the upside from increasingly complex chip designs that demand additional deposition and etch steps. 1
KeyBanc’s separate note on the call pointed to Applied’s heavier reliance on “trailing-edge” process technology — older manufacturing nodes — and its China exposure as factors dragging down its valuation multiple compared to peers. The firm also highlighted conventional DRAM, a memory chip type, as “arguably the AI-related device facing the most scarcity,” suggesting this could drive increased capacity spending. 2
TSMC’s move to raise its 2026 capital spending forecast to $52 billion-$56 billion set the tone this week, reshaping expectations across the equipment sector. Traders scrambled to align that hefty budget with potential orders at key suppliers like Applied, ASML, Lam Research, and KLA. 3
The upcoming U.S. session is delayed, with both Nasdaq and the NYSE closed Monday for Martin Luther King Jr. Day. That means Tuesday will be the first chance to see if the sector rally continues after the extended break. 4
Applied’s rise on Friday stood out while major U.S. indexes barely moved or slipped, highlighting that its recent trading has leaned more on chip-cycle outlooks than general market mood.
Still, there’s a clear “but.” If capex optimism is premature — or if demand tied to China and mature-node chips weakens — the very exposure analysts see as a valuation drag could hurt near-term orders. And “multiple expansion” can flip just as fast if investors conclude they’ve already priced in enough future growth.
Traders are waiting on further company updates and the upcoming wave of chipmaker earnings, along with factory spending figures that typically influence tools. Applied is slated to release results on Feb. 12, per Nasdaq. 5
