In a report released yesterday, Shane Brett CFA from Morgan Stanley maintained a Hold rating on Applied Materials (AMAT – Research Report), with a price target of $158.00.
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Shane Brett CFA’s rating is based on a combination of factors influencing Applied Materials’ future performance. One of the key considerations is the mixed outlook on TSMC and DRAM growth. While some analysts are optimistic about the potential market share gains in 2026 due to advancements like GAA and backside power, Shane Brett remains cautious, noting that these gains have not materialized in 2024 and expressing a conservative stance on future forecasts.
Additionally, the DRAM sector presents challenges, with expectations of a 12% decline in AMAT’s DRAM revenue for FY26, contrasting with more optimistic street estimates. The valuation debate further complicates the outlook, as some argue for a higher trading multiple for SPE, while others point out that current valuations are already elevated. Given these mixed signals and the lack of clear upside potential, Shane Brett has opted for a Hold rating, reflecting a balanced view amidst the uncertainties and potential downward revisions in estimates.
AMAT’s price has also changed slightly for the past six months – from $169.410 to $176.550, which is a 4.21% increase.