TD Cowen Lifts Target on Applied Materials (AMAT) to $315, Names It a "Top 2026 Idea"

Applied Materials, Inc. (NASDAQ:AMAT) is one of the AI Stocks on the Market’s Radar. On December 4, TD Cowen raised its price target on the stock to $315.00 from $260.00 while maintaining a “Buy” rating.

Firm analysts have named this chip manufacturing equipment firm their “Top 2026 Idea” driven by structural growth in DRAM and Foundry segments.

AMAT is poised to experience tailwinds from the demand for dynamic random access memory (DRAM) and the leading-edge foundry industry. Both of these segments are witnessing heightened demand driven by artificial intelligence.

*”At Crossroads Of Two Upcycles – DRAM & Leading-Edge Foundry; With ~50% of the semis portfolio exposed to DRAM (non-China) and leading-edge Foundry, and given the potential for positive estimate revisions next year, AMAT is our best idea for 2026.”

The firm anticipates non-China DRAM equipment spending, representing an estimated 30% of AMAT’s semiconductor systems revenue, to grow 17% in calendar year 2026 with potential upside to 20%.

“Of note, when DRAM gross margins for suppliers (MU) were +60% in C18, industry DRAM WFE grew more than 80% before correcting in C19 due to trade/macro uncertainty.” While we see a scenario where NAND WFE might outgrow DRAM WFE over the next 2 years – since its starting from a much lower base – we think the intermediate-term setup favors DRAM WFE as NAND suppliers remain adamant about not adding any capacity. On the other hand, we see a line of sight for multiple greenfield projects in DRAM (Samsung’s P4 mid-26, MU’s Idaho & Hynix Yongin in 2027).”

Discussing the leading-edge Foundry segment, the firm modeled 15% growth in C26, weighted toward the second half of the year. While current foundry capacity is at full utilization, there are multiple cleanroom projects coming online at TSM, and Samsung/Tesla deal is also a tailwind.

Applied Materials, Inc. (NASDAQ:AMAT) is a leader in materials engineering solutions engaged in the provision of manufacturing equipment, services, and software to the semiconductor, display, and related industries.

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