I'm LongbridgeAI, I can summarize articles.Goldman Sachs named Applied Materials (AMAT) a 'Top Pick' and rated it a Buy, citing benefits from AI infrastructure spending. The bank projects wafer fabrication equipment spending to reach $281 billion by 2028. AMAT reported strong Q3 revenue growth and guidance exceeding estimates. Other firms like Stifel also maintain positive ratings, with a consensus Strong Buy and an average price target of $692.40.
Applied Materials (AMAT) is the best stock to own among semiconductor equipment makers, says Wall Street investment bank Goldman Sachs (GS). In a note to clients, Goldman Sachs rated Applied Materials' stock a Buy, and named it as the "top pick" among global semiconductor equipment manufacturers.
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As a manufacturer of semiconductor equipment, Applied Materials should benefit from ongoing spending tied to the artificial intelligence (AI) infrastructure buildout, says Goldman Sachs. Applied Materials reported fiscal third-quarter revenue that rose 15% sequentially and provided revenue guidance of $10.25 billion for its next quarter, exceeding Wall Street estimates.
Several other Wall Street firms recently reiterated their positive ratings AMAT stock, including Stifel (SF) and Cantor Fitzgerald.
Wafer Fabrication
Goldman Sachs said that it remains bullish on wafer fabrication equipment through 2028, citing a positive outlook for semiconductor capital expenditures. The investment bank now projects spending on wafer fabrication equipment of $150 billion in 2026, $218 billion in 2027, and $281 billion in 2028, representing increases of 36%, 45%, and 29% year-over-year, respectively.
Applied Materials is expected to be a chief beneficiary of the increased spending on wafer fabrication equipment, and that should in turn keep AMAT stock trending in the right direction. Goldman Sachs also expects the semiconductor sector to remain capacity constrained through 2028 despite higher spending levels in coming years, which speaks to the huge demand currently.
Is AMAT Stock a Buy?
Applied Materials' stock has a consensus Strong Buy rating among 28 Wall Street analysts. That rating is based on 25 Buy and three Hold recommendations issued in the last three months. The average AMAT price target of $692.40 implies 42% upside from current levels.