Applied Materials (AMAT) Is Up 17.3% After Analyst Upgrade on DRAM and AI Demand Momentum

• Earlier in September 2025, Morgan Stanley upgraded Applied Materials following reports of robust momentum in the DRAM equipment segment and expectations for strong revenue growth from leading-edge customers.
• This upgrade coincided with analyst optimism that Applied Materials stands to benefit from AI-fueled semiconductor demand and significant investments in advanced chip architectures.
• We'll examine how heightened analyst confidence in Applied Materials' exposure to DRAM and AI trends shapes the company's investment outlook.

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Applied Materials Investment Narrative Recap

Belief in Applied Materials centers on its ability to capture growth from ongoing AI and advanced semiconductor cycles, especially as investments ramp up in DRAM and cutting-edge chip architectures. The recent news, an analyst upgrade and board resignation, does not materially shift the company's top short-term catalyst (AI-driven DRAM demand), nor does it impact the continuing main risk around export restrictions and market exposure to China.

Among the latest announcements, Applied Materials’ completed fixed-income offering stands out for relevance, it enhances financial flexibility and supports the company’s capacity to invest in R&D and operational initiatives tied to core growth catalysts, including AI and DRAM momentum.

However, even amid these positive signals, investors should be aware of the ongoing uncertainties facing Applied’s largest market in China as...

Read the full narrative on Applied Materials (it's free!)

Applied Materials is projected to deliver $32.5 billion in revenue and $9.2 billion in earnings by 2028. This outlook is based on an assumed annual revenue growth rate of 4.3% and reflects a $2.4 billion increase in earnings from the current level of $6.8 billion.

Uncover how Applied Materials' forecasts yield a $194.90 fair value, a 3% downside to its current price.

Exploring Other Perspectives

The Simply Wall St Community offers 21 fair value estimates for Applied Materials ranging from US$142.35 to US$230.54 per share. While there is broad disagreement among users, export control risks remain top of mind and can heavily affect future revenue visibility.

Explore 21 other fair value estimates on Applied Materials - why the stock might be worth as much as 15% more than the current price!

Build Your Own Applied Materials Narrative

Disagree with existing narratives? Create your own in under 3 minutes - extraordinary investment returns rarely come from following the herd.

• A great starting point for your Applied Materials research is our analysis highlighting 3 key rewards that could impact your investment decision.
• Our free Applied Materials research report provides a comprehensive fundamental analysis summarized in a single visual - the Snowflake - making it easy to evaluate Applied Materials' overall financial health at a glance.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

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