Mizuho Upgrades Applied Materials (AMAT) to Outperform on Global WFE Tailwinds

Applied Materials, Inc. (NASDAQ:AMAT) is one of the Buzzing AI Stocks on Wall Street. On January 27, Mizuho analyst Vijay Rakesh upgraded the stock from Neutral to Outperform with a price target of $370.00. The firm sees robust global WFE tailwinds for AMAT.

Being the number 2 WFE supplier, Mizuho sees AMAT benefiting from accelerating US/Taiwan/JP Capex. It expects global WFE spending to grow 13% year-over-year in 2026 and 12% in 2027, a notable acceleration from its prior forecasts.

Mizuho anticipates higher capital spending from Taiwan Semiconductor Manufacturing from 2026 to 2028, forecasting TSMC’s 2026 capex rising about 32% year on year to $54 billion and increasing further in 2027.

The firm also highlighted better-than-expected tool spending guidance from Intel and stronger demand tied to high-bandwidth memory, representing an estimated 30% of revenue. These trends are likely to support demand for AMAT’s advanced platforms used in leading-edge manufacturing

“…with Foundry/Logic ~65% of AMAT’s revenues, HIGHER CAPEX from TSMC (2330.TW), covered by Kevin Wang, Buy, TWD2,200PT with 2026–28E capex “significantly higher” than 2023–25, INTC tool capex better in 2026E, and DRAM with HBM upside at ~30% of Revs”

Mizuho further added how China is becoming less of a headwind as ex-China WFE revenues, which are around 70%, are accelerating faster.

“With SIGNIFICANT global WFE tailwinds and upside from TSMC/INTC capex spend expectations, we are UPGRADING AMAT to Outperform and take our PT to $370.”

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.

READ NEXT: 10 AI Stocks on Market Radar and 10 AI Stocks Analysts Are Watching

Disclosure: None.