Applied Materials (AMAT) shares pushed higher to a record price of about $331 this week after peer Taiwan Semiconductor’s (TSM) record earnings sparked a sector-wide rally.
TSMC now sees its capital expenditures hitting a whopping $54 billion this year at the midpoint, which is notably positive for AMAT given it’s a critical supplier of semiconductor manufacturing equipment.
Including recent gains, Applied Materials stock is up a remarkable 165% versus its 52-week low.
Despite its cosmic run since last April, KeyBanc analysts led by Steve Barger believe AMAT stock will push meaningfully higher from here in 2026.
Barger is particularly bullish on the company’s exposure to conventional DRAM, which he dubbed “arguably the artificial intelligence (AI) related device facing the most scarcity.”
According to him, this scarcity will make companies commit to capacity expansion, catalyzing a sustainable long-term rally in Applied Materials.
KeyBanc raised his price target on the Nasdaq-listed firm this week to $380, indicating potential upside of another 15% from current levels.
Beyond memory, Applied Materials’ exposure to logic chips positions it strongly to benefit from AI buildout as well in 2026.
Despite this balanced, diversified exposure to the semiconductor space, AMAT is more attractively priced currently than its peers, including KLA (KLAC) and Lam Research (LRCX).
At the time of writing, the California-based company is trading at a forward price-earnings (P/E) multiple of just over 30x, significantly lower than KLAC and LRCX at north of 40x each.
What’s also worth mentioning is that historically (over the past 16 years), AMAT has rallied about 5.76% on average in February, which makes up for another exciting reasons to stick with it in the near-term.
Note that Applied Materials shares do also pay a dividend yield of 0.58%.
Other Wall Street analysts seem to agree with KeyBanc’s bullish view on Applied Materials stock.
