Buy Rating for Applied Materials: Strong DRAM Demand and Revenue Growth Drive Positive Outlook

In a report released yesterday, Joseph Quatrochi from Wells Fargo maintained a Buy rating on Applied Materials (AMAT – Research Report), with a price target of $200.00.

Joseph Quatrochi has given his Buy rating due to a combination of factors including strong demand for Applied Materials’ leading-edge DRAM and F/L products, which are expected to offset declines in other areas such as ICAPS. Despite some challenges, such as a weaker AGS trajectory and disappointing AGS guidance for the second consecutive quarter, the company is anticipated to return to quarter-over-quarter growth in the upcoming October quarter.
Moreover, Applied Materials is expected to benefit from a significant growth in revenue from advanced DRAM customers, with projections of over 40% year-over-year growth in fiscal 2025. The company also continues to deliver strong gross margins, exceeding expectations in the second quarter of fiscal 2025. These positive aspects, along with a slightly adjusted price target of $200, contribute to the Buy rating, as the company is positioned to capitalize on its strengths in the semiconductor market.

Quatrochi covers the Technology sector, focusing on stocks such as ON Semiconductor, Analog Devices, and Applied Materials. According to TipRanks, Quatrochi has an average return of 15.7% and a 60.58% success rate on recommended stocks.

In another report released today, TD Cowen also reiterated a Buy rating on the stock with a $220.00 price target.