Applied Materials Poised for Sustained Growth Amid AI Boom, Analysts Say

Wall Street analysts raise price targets as semiconductor equipment maker crushes Q1 earnings and forecasts multi-year demand surge.

Published on Feb. 21, 2026

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Applied Materials, the leading semiconductor equipment manufacturer, reported blowout fiscal first-quarter earnings that beat estimates on both the top and bottom lines. The company's strong results and bullish guidance have Wall Street analysts convinced that the AI-driven boom in chip demand will fuel a multi-year growth cycle for AMAT. Analysts have raised their price targets, citing Applied Materials' market leadership in key areas like leading-edge logic chips and high-bandwidth memory used in AI applications.

Why it matters

Applied Materials is a bellwether for the semiconductor industry, and its performance is seen as a barometer for the overall health of chip demand and manufacturing. The company's ability to capitalize on the AI-fueled surge in chip spending is crucial, as it could translate into sustained growth and market share gains for the equipment maker over the next several years.

The details

Applied Materials reported revenue of $7.01 billion and adjusted EPS of $2.38 in fiscal Q1, topping analyst estimates. The company expects semiconductor systems revenue to grow more than 20% this calendar year, with the second half weighted even more strongly. CEO Gary Dickerson cited the "race to build out AI infrastructure" as a key driver of "unprecedented spending on semiconductors, semiconductor manufacturing capacity and research and development." Applied Materials is the market leader in areas like leading-edge logic chips and high-bandwidth memory DRAM used in AI applications, positioning it to benefit from this surge in demand.

  • Applied Materials reported fiscal Q1 earnings on February 12, 2026.
  • The company expects semiconductor systems revenue to grow more than 20% in calendar year 2026.

The players

Applied Materials

A leading semiconductor equipment manufacturer that provides manufacturing tools and services for the production of semiconductor chips.

Gary Dickerson

The CEO of Applied Materials who discussed the company's strong performance and outlook during the earnings call.

Brice Hill

The CFO of Applied Materials who provided details on the company's capacity expansion and inventory buildup to meet increased demand.

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What they’re saying

“The race to build out AI infrastructure is driving unprecedented spending on semiconductors, semiconductor manufacturing capacity and research and development.”

— Gary Dickerson, CEO, Applied Materials (Earnings call transcript)

“As the largest semicap with the broadest portfolio, AMAT has strong leverage to this multi-year WFE cycle focused in leading-edge F/L and DRAM to support outsized AI demand.”

— Vivek Arya, Analyst, Bank of America (Analyst note)

What’s next

Applied Materials is expected to provide more details on its capacity expansion plans and the long-term outlook for the semiconductor equipment market during its upcoming investor day event.

The takeaway

Applied Materials' strong performance and bullish guidance suggest the company is well-positioned to capitalize on the AI-driven surge in chip demand, which could fuel a multi-year growth cycle for the semiconductor equipment maker. Analysts are increasingly optimistic about AMAT's prospects, raising price targets and citing the company's market leadership in key areas.