Applied Materials stock (AMAT) moved higher on Tuesday after UBS (UBS) issued one of the most bullish calls on the name in months. The firm lifted its rating to Buy from Neutral and raised its price target to $285 from $250, arguing that market doubts about the company’s growth prospects are misplaced. Shares traded around $234 in morning action, adding to a 42% gain this year.
TipRanks Black Friday Sale
- Claim 60% off TipRanks Premium for the data-backed insights and research tools you need to invest with confidence.
- Subscribe to TipRanks' Smart Investor Picks and see our data in action through our high-performing model portfolio - now also 60% off
The upgrade lands at a moment when investors have been favoring rivals such as KLA (KLAC) and Lam Research (LRCX), both of which have more than doubled in 2025. UBS analyst Timothy Arcuri acknowledged that underperformance, writing that “Given AMAT’s stock underperformance YTD, we believe investors hold little confidence around the company’s ability to outperform its served market.” He followed that by making the opposite case. UBS believes Applied Materials is positioned to beat the wafer fabrication equipment market over the next two years as memory spending accelerates.
UBS Sees Growth Drivers Aligning for AMAT
UBS expects the total WFE market to expand more than 20% next year to $136.5 billion, with most of that growth coming from memory end markets. The firm sees that figure climbing toward $145 billion in 2027, well ahead of where most of Wall Street sits today. In Arcuri’s view, the core catalyst is clear. “Within our coverage universe, AMAT stands out as the largest beneficiary of this DRAM spending surge,” he wrote.
DRAM has entered what UBS called a demand “super-cycle” as artificial intelligence workloads push data centers to consume memory at unprecedented rates. Applied Materials is one of the largest suppliers of equipment used to produce DRAM, giving it direct leverage to that upswing. The bank said investors are underestimating how much that exposure can lift revenue and earnings through 2026.
China Could Deliver an Unexpected Lift
The outlook for China has been one of the biggest unknowns hanging over the stock. Applied Materials lost share in China this year, and several firms expect the country’s WFE spending to shrink in 2026. UBS disagreed and now projects 11% year-over-year growth instead. That would mark a sharp break from consensus and could serve as an incremental tailwind for Applied Materials if it materializes.
Despite the recent lag relative to peers, most research shops remain constructive. Two-thirds of the 36 analysts covering the stock rate it a Buy or equivalent. UBS now sits near the top of the range with its $285 target, betting that memory spending, AI demand, and a stronger China cycle can reset expectations for one of the industry’s most important suppliers.
Is Applied Materials a Good Stock to Buy?
AMAT currently has a Moderate Buy consensus rating on Wall Street, based on 22 analysts’ views. The stock has received 16 Buy and seven Hold ratings, with no analysts rating it a Sell. Interestingly, AMAT’s average price target of $251.78 implies ~8% upside potential over the next 12 months.
