Morgan Stanley resets Applied Materials stock price forecast

In a Morgan Stanley enactment shared with TheStreet, analysts led by Shane Brett raised their terms people connected Applied Materials to $502 and reiterated an overweight rating, portion keeping the banal arsenic a Top Pick successful semiconductor superior equipment. The telephone came aft Applied delivered what Morgan Stanley described arsenic different beardown “beat and raise,” with upside crossed respective parts of the business.

The caller people compares with Applied’s May 14 closing terms of $440.56, according to the note, implying astir 14% upside from that level. Morgan Stanley besides said the banal communicative has shifted from whether Applied tin outperform 2026 wafer fab instrumentality maturation to however overmuch it tin outperform.

Morgan Stanley raises Applied Materials people aft it delivers grounds results

The institution reported fiscal second-quarter revenue of $7.91 billion, up 11% from a twelvemonth earlier, portion GAAP net per stock roseate 33% to a grounds $3.51. Non-GAAP EPS accrued 20% to a grounds $2.86, portion non-GAAP gross borderline reached 50.0%.

Applied besides guided fiscal third-quarter gross to $8.95 billion, positive oregon minus $500 million, and non-GAAP diluted EPS to $3.36, positive oregon minus 20 cents. That guidance became a large portion of Morgan Stanley’s much bullish view, since the slope had antecedently expected April-quarter gross supra $8.4 billion, and Applied’s midpoint came successful higher.

Chief Executive Gary Dickerson said Applied present expects its semiconductor instrumentality concern to turn much than 30% successful calendar 2026. He pointed to the “rapid planetary build-out of AI computing infrastructure” and the company’s positions successful leading-edge logic, DRAM, and precocious packaging arsenic enactment for sustained gross and nett growth.

AI request is moving deeper into the proviso concatenation

Morgan Stanley’s telephone rests connected the thought that Applied is benefiting from the parts of AI spending that beryllium beneath the surface.

The slope raised its full-year systems maturation forecast for Applied from 28.6% to 34.2%, portion modeling the institution to outgrow 2026 wafer fab instrumentality maturation by much than 10 percent points.

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