KeyBanc Raises Applied Materials (AMAT) Target to $380, Keeps Overweight Rating

Applied Materials, Inc. (NASDAQ:AMAT) is one of the AI Stocks on Market Radar. On January 16, KeyBanc raised the price target on the stock to $380.00 (from $285.00) while maintaining an “Overweight” rating.  The firm sees AMAT well-positioned for vertical scaling and DRAM-driven capacity growth.

KeyBanc noted that AMAT’s valuation is reasonable even though it has lagged peers such as KLA and Lam Research in multiple expansions. It attributed this underperformance to the company’s higher exposure to trailing-edge nodes for both China and ROW customers.

AMAT, the firm noted, remains well positioned to benefit from rising disposition and etch intensity as chip architectures become more complex. It also highlighted AMAT’s exposure to conventional DRAM, which is "arguably the AI-related device facing the most scarcity.” This is a potential driver of capacity expansion opportunities for the company.

Meanwhile, AMAT’s Global Services segment is likely to post low double-digit revenue growth in fiscal years 2027-2028. This is due to customers running their installed equipment base at high utilization levels.

While we acknowledge the front-end names generally perform as ‘one trade’, we think AMAT should screen better for new money given its relative valuation and integral position in enabling semiconductor manufacturing.

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.

While we acknowledge the potential of AMAT as an investment, we believe certain AI stocks offer greater upside potential and carry less downside risk. If you're looking for an extremely undervalued AI stock that also stands to benefit significantly from Trump-era tariffs and the onshoring trend, see our free report on the best short-term AI stock.

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