Wall Street Sees 17% More Upside in Applied Materials Stock. Here’s the Math.

Key Takeaways for Applied Materials Stock as of July 2026

• Record Quarter: Applied Materials posted $7.91B in Q2 revenue, up 11% YoY, non-GAAP EPS of $2.86, up 20% YoY, and a non-GAAP gross margin of 50%, its highest level in over 25 years.
• Guidance Raise: Management lifted its 2026 equipment growth guide from 20% to over 30%.
• DRAM and Packaging Inflection: DRAM revenue hit $1.7B, up 18% YoY, while advanced packaging revenue is tracking toward $2B, up over 50% this year.
• Capacity Signal: CEO Gary Dickerson tied the raise to customer behavior directly, telling investors: “we now expect our semiconductor equipment business will grow more than 30% this calendar year.”

Applied Materials stock just posted its best quarter in years, and the stock is still down more than 25% from its peak. TIKR breaks down exactly what’s driving that gap here on TIKR for free →

Applied Materials Raises Its 2026 Equipment Growth Guide to Over 30%

Applied Materials (AMAT) told investors on its May 14 fiscal second-quarter call that semiconductor equipment revenue will grow more than 30% in calendar 2026, up from the 20% growth outlook it had given previously. The upgrade came alongside record fiscal Q2 revenue of $7.91 billion, up 13% sequentially and 11% year over year, and the company’s highest gross margin in more than 25 years.

The raise wasn’t a rounding change. CEO Gary Dickerson tied it directly to DRAM and advanced packaging, the two markets where Applied has been building share for years. At the June 26 Master Class, Kevin Moraes laid out the scale: advanced packaging revenue is projected to grow more than 50% in 2026 to over $2 billion, after already tripling between 2020 and 2024 against a prior forecast of doubling. DRAM revenue hit $1.7 billion in fiscal Q2, up 18% year over year, with Applied holding roughly 10 points of share gained in that market since 2013.

Dickerson framed the shift on the earnings call this way: “As customers find new ways to reallocate or create space, we are seeing incremental requests for equipment deliveries in 2026, and we now expect our semiconductor equipment business will grow more than 30% this calendar year.” That single sentence moved the growth algorithm for the stock. It wasn’t a demand story anymore, it was a capacity-unlock story, with customers physically finding cleanroom space faster than Applied had modeled.

The Q2 beat wasn’t just a revenue story: Applied Materials topped Street EBIT estimates by 6% with $2.54 billion in operating income and 32% operating margin, and that operating-line beat is exactly what management pointed to when it raised the 2026 systems growth guide, giving the 30%-plus outlook a profitability anchor, not just a bookings one.

The EPIC collaboration platform backs that claim with names, not adjectives. TSMC, Micron, Samsung and SK Hynix signed on as founding partners, and Broadcom joined specifically for advanced packaging work just before the June 26 call. Applied is also 100-plus factory projects deep in its customer pipeline, more than 10 of them added in the most recent quarter alone.

This is the development repricing Applied Materials stock: a raised, dated growth guide backed by named customer commitments in the two markets carrying the highest materials intensity in the industry.

Applied’s DRAM and packaging inflection just got a formal growth number attached to it. See how TIKR’s analysts are pricing that shift into the model [right here on TIKR for free →

Applied Materials Stock Sits 26% Below Its Highs Despite the Guidance Raise

Applied Materials stock hit a maximum drawdown of 27% on July 20, 2026, and still traded 26% below its peak as of the most recent close.

The stock fell another 5% on July 24 alone, closing at $536 That drop came after the company had already told investors its equipment business would grow faster than previously guided, not slower, a disconnect that puts the drawdown squarely at odds with the fundamental story from Section 1.

Wall Street hasn’t backed off the name during the selloff.

Of 35 analysts covering Applied Materials stock, 28 rate it a buy and 4 rate it outperform, 6 hold it, and just 1 rates it underperform, with no sell ratings on the stock.

The mean price target sits at $628, which puts the stock’s target-to-close ratio at 117%, meaning the Street collectively sees roughly 17% upside from current levels even before accounting for the raised 2026 growth guide.

TIKR Values Applied Materials Stock at $669, Pricing In the DRAM and Packaging Ramp

TIKR’s mid-case model values Applied Materials stock at $669 by October 2030, implying a 25% total return from the current price of $536, or 5% annualized over 4.3 years.

That annualized return trails the kind of multi-bagger math some AI infrastructure names have put up, but it comes from a company already generating record gross margins near 50% at the corporate level and 55% within Semiconductor Systems. It’s a return built on execution, not multiple expansion.

The target is reachable because the growth math from Section 1 is already showing up in the numbers, not just the guidance. Semiconductor Systems revenue hit a record $5.97 billion in fiscal Q2, DRAM grew 18% year over year, and advanced packaging is tracking toward that $2 billion-plus, 50%-growth year. A 30%-plus equipment growth guide sitting on top of an already-record quarter is the kind of gap between guidance and price that tends to close.

TIKR’s model puts a $669 target and a 25% return on a stock still down nearly 26% from its highs. See the full model breakdown here on TIKR for free →

Should You Invest in Applied Materials, Inc.?

The only way to really know is to look at the numbers yourself. TIKR gives you free access to the same institutional-quality financial data that professional analysts use to answer exactly that question.

Pull up Applied Materials, Inc. stock and you’ll see years of historical financials, what Wall Street analysts expect for revenue and earnings in the quarters ahead, how valuation multiples have moved over time, and whether price targets are trending up or down.

You can build a free watchlist to track Applied Materials, Inc. stock alongside every other stock on your radar. No credit card required. Just the data you need to decide for yourself.

Access Professional Tools to Analyze AMAT stock on TIKR for Free →

Looking for New Opportunities?

Disclaimer:

Please note that the articles on TIKR are not intended to serve as investment or financial advice from TIKR or our content team, nor are they recommendations to buy or sell any stocks. We create our content based on TIKR Terminal’s investment data and analysts’ estimates. Our analysis might not include recent company news or important updates. TIKR has no position in any stocks mentioned. Thank you for reading, and happy investing!