Morgan Stanley upgrades Applied Materials to Equal Weight on valuation

Morgan Stanley upgraded Applied Materials (AMAT) to Equal Weight from Underweight with a price target of $158, down from $162. The firm says the stock’s valuation drives the upgrade as its estimates are below consensus. Morgan Stanley’s fiscal 2026 revenue and earnings estimates are 8% and 10% below the Street, respectively, due to a more negative leading logic and DRAM view, the analyst tells investors in a research note. However, at Applied Material’s current valuation and given the stock’s year-to-date underperformance versus peers, it is unlikely the shares will materially underperform from here, even if Street estimates converge closer to Morgan Stanley’s, the firm contends.