Applied Materials, Inc. (NASDAQ: AMAT) is back in the spotlight on December 16, 2025, as fresh industry forecasts and a wave of Wall Street price-target increases reinforce a central narrative for semiconductor equipment investors: the AI buildout is pulling forward demand for leading-edge logic, memory (especially HBM-related DRAM), and advanced packaging—exactly the mix where Applied Materials has been positioning its portfolio.
As of the latest available quote on December 16, AMAT shares traded around $257, down roughly 1.6% on the day, after moving between roughly $256 and $262.
AMAT stock price action: what the market is signaling on Dec. 16
Applied Materials’ pullback Tuesday comes after the stock recently traded near its 52-week high (around $276) earlier this month—an important context point because it helps explain why “good news” (like bullish forecasts) doesn’t always translate into an immediate rally. [1]
When a stock is priced for strong growth, investors often demand incremental upside catalysts (or clearer near-term earnings upside) to push it higher again. Today’s debate is whether the latest industry forecasts and analyst target hikes are enough to reset expectations upward—especially into 2026.
The biggest AMAT tailwind today: SEMI’s new equipment “giga-cycle” forecast
A major driver in today’s semiconductor-equipment conversation is SEMI’s updated outlook, which points to multi-year growth across both front-end and back-end equipment segments.
SEMI says total semiconductor manufacturing equipment sales are forecast to hit:
- $133 billion in 2025 (up 13.7% year over year)
- $145 billion in 2026
- $156 billion in 2027 (a record) [2]
The organization explicitly ties that momentum to AI-driven investment, citing leading-edge logic, memory, and advanced packaging as the core demand engines through 2027. [3]
Why this matters specifically for Applied Materials (AMAT)
Applied Materials is one of the key U.S. beneficiaries whenever wafer fab equipment spending expands, because its tools are used across multiple critical process steps in semiconductor production (and it also has a large services business tied to installed base).
SEMI’s segment detail is particularly relevant for AMAT bulls:
- Wafer fab equipment (WFE) is projected to rise 11% in 2025 to $115.7B, then grow 9% in 2026 and 7.3% in 2027 (reaching about $135B by 2027). [4]
- Test equipment is projected to surge 48.1% in 2025 to $11.2B, while assembly & packaging equipment is forecast to rise 19.6% in 2025 to $6.4B, reflecting the industry’s shift toward advanced packaging and more complex device architectures. [5]
- DRAM equipment sales are projected to rise to $22.5B in 2025 (+15.4%), with further growth expected in 2026 and 2027—important because AI servers are increasing demand for memory bandwidth (HBM) and advanced DRAM nodes. [6]
Reuters also highlighted SEMI’s forecast that equipment used to make chip wafers could rise about 9% to $126B in 2026 and 7.3% to $135B in 2027, noting Applied Materials among the top global suppliers positioned to benefit. [7]
Analyst upgrades and price targets: the AMAT “2026 setup” gets louder
On the analyst side, today’s story is not just that AMAT remains widely covered—it’s that targets are being reset higher as firms model a stronger 2026 equipment environment.
One of the most notable new entries dated December 16, 2025:
- Cantor Fitzgerald maintained a Buy rating and raised its AMAT price target to $350 from $300, according to published consensus/ratings tables. [8]
Recent target changes being digested by the market today include:
- Jefferies maintained Buy and raised its target to $360 from $260. [9]
- Wells Fargo raised its target to $290 from $255 while maintaining an overweight-style stance (often listed as “Overweight” by newswires). [10]
What these targets imply (and why investors should read past the headline number)
Price targets are not guarantees, but clusters of large revisions often matter because they reflect:
- Higher modeled WFE spending, particularly linked to AI infrastructure demand
- A stronger memory capex cycle (especially DRAM/HBM)
- Increased confidence that advanced packaging investment becomes a sustained multi-year theme
In other words: analysts are not only raising targets—they’re reinforcing the idea that Applied Materials is levered to the parts of semiconductor capex that are still expanding even when other end-markets (like consumer electronics) are uneven.
“Top picks” season: where AMAT fits in big-bank 2026 narratives
Another piece of December 16 market chatter: a J.P. Morgan semiconductor “top picks” list for 2026 that includes Applied Materials among favored names tied to the ongoing AI infrastructure buildout (even if not always the single top pick). [11]
For AMAT investors, this kind of positioning matters because it can influence:
- Institutional watchlists into year-end and early January rebalancing
- “Portfolio construction” demand (owning the AI buildout across the value chain, including equipment)
- Relative performance within the semiconductor group (AMAT vs. peers like ASML, Lam Research, and KLA)
Fundamental backdrop: what Applied Materials last guided (and why it still matters today)
While today’s headlines are forecast- and analyst-driven, AMAT’s most recent official results remain the anchor for how investors handicap the next several quarters.
In its fiscal Q4 and full-year FY2025 report (released November 13, 2025), Applied Materials reported:
- Record FY2025 revenue of $28.37B (up 4% YoY)
- Record FY2025 GAAP EPS of $8.66 and record non-GAAP EPS of $9.42 [12]
For the first quarter of fiscal 2026, the company guided to:
- Revenue of $6.85B ± $0.5B
- Non-GAAP diluted EPS of $2.18 ± $0.20 [13]
Those guideposts are important because the bull case for AMAT into 2026 increasingly leans on a “second-half 2026 acceleration” narrative—i.e., the idea that AI-driven investments translate into broader tool demand as next-gen nodes and advanced packaging ramp.
Shareholder returns: dividend update is still fresh going into 2026
Applied Materials also recently reinforced its capital return story. On December 12, 2025, the company announced its board approved a quarterly cash dividend of $0.46 per share, payable March 12, 2026, to shareholders of record Feb. 19, 2026. [14]
The same release noted:
- The $0.46 dividend reflects a prior 15% increase (from $0.40 to $0.46) announced in March 2025
- Applied returned nearly $6.3B to shareholders in fiscal 2025 through dividends and buybacks, with about $14B remaining under repurchase authorization at year-end [15]
For income-oriented investors, it’s not that AMAT is a high-yield stock—rather, the dividend and buybacks can help support total return during periods when the stock consolidates after large rallies.
Risks and pressure points investors are still watching
Even with a bullish equipment-cycle forecast, AMAT remains exposed to several risks that can re-enter the headlines quickly:
1) Export controls and China-linked demand uncertainty
Applied Materials has previously warned that expanded U.S. export restrictions could pressure revenue, including an expected fiscal 2026 revenue hit tied to broader chip export curbs. [16]
Investors continue to watch how tool shipment rules, licensing requirements, and customer mix affect both growth and margins.
2) Geographic concentration of equipment spend
SEMI expects China, Taiwan, and Korea to remain the top equipment destinations through 2027, with China projected to maintain a leading position even as growth moderates from 2026. [17]
That matters for AMAT because where fabs get built—and what nodes they build—shapes which tool categories see the most upside.
3) Valuation and “expectations risk”
After a strong 2025 run and a recent approach toward 52-week highs, AMAT can be sensitive to:
- any hint of order normalization
- cautious guidance from large customers
- broader market risk-off moves (rates, macro surprises)
What to watch next for Applied Materials stock
Looking forward from December 16, 2025, here are the most actionable “watch items” that tend to move AMAT:
- WFE spending updates (SEMI data, customer capex plans, and peer commentary) [18]
- DRAM/HBM investment trajectory (memory capex is increasingly a swing factor) [19]
- Additional analyst target revisions (especially if multiple firms converge near the high-end targets now being published) [20]
- Export-control headlines and any company-specific disclosure that changes the 2026 revenue impact discussion [21]
References
1. www.marketwatch.com, 2. www.semi.org, 3. www.semi.org, 4. www.semi.org, 5. www.semi.org, 6. www.semi.org, 7. www.reuters.com, 8. www.investing.com, 9. www.investing.com, 10. www.investing.com, 11. www.marketwatch.com, 12. www.globenewswire.com, 13. www.globenewswire.com, 14. www.globenewswire.com, 15. www.globenewswire.com, 16. www.reuters.com, 17. www.semi.org, 18. www.semi.org, 19. www.semi.org, 20. www.investing.com, 21. www.reuters.com
