Investment firm TD Cowen has boosted its price target on Applied Materials (AMAT) from $260 to $315, while maintaining a Buy rating. Analysts, led by five-star analyst Krish Sankar, see AMAT as their top stock pick for 2026, largely because around 50% of its semiconductor business is tied to dynamic random-access memory (DRAM) outside of China and advanced foundry work. As a result, this strong positioning could lead to upward earnings revisions in the year ahead.
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In addition, when zooming in on DRAM wafer fabrication equipment (WFE), which makes up about 30% of AMAT’s chip systems business, TD Cowen expects 17% growth in 2026, with a possible upside of up to 20%. While NAND WFE could grow even faster because it’s starting from a lower base, the firm believes that DRAM has the edge in the medium term. That’s because NAND suppliers are holding back on expanding capacity, while DRAM players like Samsung (SSNLF), Micron (MU), and SK hynix have already committed to building new production sites.
As for leading-edge foundries, the outlook is strong there too. TD Cowen expects 15% growth in 2026, especially in the second half of the year. And although it’s early to estimate growth for 2027, current signs point to even more investment ahead. In fact, capacity is already maxed out at several foundries, and new cleanroom facilities are expected to go live soon, especially at TSMC (TSM). Additionally, a partnership between Samsung and Tesla (TSLA) is seen as another tailwind.
What Is the Target Price for AMAT?
Turning to Wall Street, analysts have a Strong Buy consensus rating on AMAT stock based on 17 Buys, four Holds, and zero Sells assigned in the past three months. Furthermore, the average AMAT stock price target of $261.74 per share implies that shares are trading near fair value.
