Applied Materials shares fell as much as 7% to around $462 on Tuesday afternoon, marking the sixth consecutive losing session. Applied Materials shares are down about 15% since Oct. 5. Applied Materials shares sit 36% below the record closing price of $723 set on June 30. CEO Gary Dickerson and the leadership team presented targets through 2030 at Semicon West in San Francisco on Tuesday morning.
Cantor Fitzgerald analyst C.J. Muse reiterated an Overweight rating and an $850 price target in a note shared the same day. Cantor sees 84% upside, while the target implies roughly 85% upside from Tuesday's price. The Philadelphia Semiconductor Index also recorded a six-session losing streak and is down about 8% from the Oct. 5 close.
SK Hynix plunged 10.1% in Seoul after a report that China's ChangXin Memory Technologies had progressed on a new memory architecture both South Korea rivals are developing. Samsung Electronics lost 7.4% after the same report about ChangXin Memory Technologies. Micron Technology fell 4.8%. Lam Research dropped 3.5%. KLA fell 3.4%. ASML Holding declined 2.6%. Applied Materials fell twice as much as any of those equipment makers.
Applied Materials expects spending on wafer fab equipment, the machines chipmakers buy to build and upgrade factories, to grow faster through 2030 than over the past decade. Applied Materials expects artificial intelligence to drive about 80% of the incremental growth. Applied Materials targets at least 2 percentage points of market share gain. Applied Materials' services arm is expected to grow more than 20% in 2026. Applied Materials' services arm is expected to exceed $12 billion in revenue by 2030. Applied Materials' profitability targets call for a 54% gross margin and a 40% operating margin.
Applied Materials' model implies earnings of $33 to $42 a share in 2030, assuming wafer fab equipment spending of $300 billion to $400 billion. Applied Materials earned $9.42 a share in fiscal 2025. Dickerson said the global expansion of AI infrastructure is driving a new era of growth for wafer fab equipment.
Muse said the 2030 model aligns with Cantor's stretch estimate of $35 a share for 2029 and is too cautious in places. Muse called the 54% gross margin conservative because of the mix shift toward Silicon and value-based pricing. Muse said the 40% operating margin at the high end of the equipment spending range indicates earnings potential near $50 a share. Cantor disputed a near-term threat from ChangXin's architecture, placing the threat closer to 2030 and citing cost and yield disadvantages without extreme ultraviolet lithography. Cantor said recent comments by Broadcom CEO Hock Tan in Singapore were misread and described easing memory shortages rather than oversupply.
Muse said everything heard at Semicon West points to a shortage of computing capacity. Muse said equipment makers are being asked to expedite deliveries for 2028 to 2030. Applied Materials trades at about 18 times Cantor's 2028 earnings estimate of $25 a share at Tuesday's price. Cantor's $850 target uses 24 times a 2030 earnings estimate of $48 a share, discounted back three years at 10%. Muse said Cantor would buy Applied Materials shares after price declines. Muse identified China as the main risk, where Applied Materials has the most domestic exposure among equipment makers.
Benzinga Analyst Ratings shows 26 analysts give Applied Materials a consensus Buy rating and an average target of $652, about 41% above Tuesday's price. Cantor's $850 target has stood since at least mid-August, when Applied Materials shares traded above $600. The implied upside has grown only because the share price has fallen.
Applied Materials reports fiscal fourth-quarter results on Nov. 12. Analysts expect earnings of $4.05 a share, up from $2.17 a year earlier. Analysts expect revenue of $10.30 billion, up from $6.80 billion a year earlier.
Applied Materials Shares Drop 6th Day; Cantor Fitzgerald Sees 84% Upside
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Summary
Applied Materials price movement continued on Tuesday, with shares falling as much as 7% for the sixth straight session. The stock has lost about 15% since October 5 and 36% from its June 30 peak. Cantor Fitzgerald analyst C.J. Muse maintained an Overweight rating and $850 price prediction, suggesting an 84% upside from current levels. The firm attributes AI-driven demand for wafer fab equipment as a key growth driver through 2030. Applied Materials also set 2030 financial goals, including 54% gross margin and 40% operating margin.
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