AMAT Stock Has Doubled This Year: Analyst Trims Price Target But Sees Higher 2027 Sales, Profit

• Morgan Stanley raised its 2027 revenue forecast for Applied Materials to $50.7 billion and its EPS estimate to $20.92, citing higher NAND demand and better margins.
• KIOXIA will join Applied Materials’ EPIC Center to collaborate on advanced memory structures, stacking, packaging and materials engineering.
• AMAT stock doubled year to date, and retail traders see Micron’s quarterly report, due on Wednesday, as a fresh catalyst.

Applied Materials (AMAT) shares jumped 5.2% on Tuesday, making the semiconductor equipment maker the top gainer on the Nasdaq-100 and pushing the stock to its highest level since Aug. 18, after Morgan Stanley raised its expectations for the company’s 2027 financials.

In after-hours trading, the company announced a partnership with Japan’s KIOXIA to develop next-generation memory technologies. The stock, however, dipped 0.2% in overnight trading following the announcement.

Morgan Stanley Ups AMAT’s 2027 Forecasts

Morgan Stanley on Monday cut its price target for AMAT to $563 from $642, which still signals a 25% upside, while maintaining an ‘equal weight’ rating. However, the research firm simultaneously raised its projections for Applied Materials’ 2027 revenue and EPS, signaling stronger earnings expectations despite the lower valuation target.

Morgan Stanley raised the revenue forecast to $50.7 billion and EPS estimate to $20.92, driven primarily by expectations for higher NAND demand and improved gross margins.

AMAT-KIOXIA Partnership

Applied Materials said KIOXIA, a major supplier of flash memory and solid-state drives, will join its EPIC Center in Silicon Valley as an innovation partner. 

The companies will work on advanced memory structures, multi-chip stacking, advanced packaging and materials engineering aimed at increasing memory density, bandwidth and energy efficiency for AI applications.  

The announcement does not represent a newly disclosed equipment purchase by KIOXIA. Instead, KIOXIA will collaborate with Applied Materials on research and development at the EPIC Center to accelerate the commercialization of new memory and packaging technologies. 

Applied Materials: AI Memory Opportunity

Applied Materials’ $5 billion EPIC Center is designed to bring chipmakers, equipment companies, universities and other partners together to develop semiconductor processes and move them more quickly from research into high-volume manufacturing.

The center gives chipmakers earlier access to Applied Materials’ technologies and the company said in August that its EPIC Center had expanded to 11 R&D engagements.

For investors, the KIOXIA tie-up reinforces the potential for AI-driven memory demand to translate into equipment spending. As memory architectures become more complex, manufacturers require additional process steps, materials and advanced packaging capabilities, potentially increasing the amount of semiconductor equipment required per wafer.

AMAT Stock Move, Retail View

These developments come as semiconductor equipment stocks have gained significantly in 2026, despite a pullback from their June peaks, driven by expectations of elevated AI-related chip spending.

Applied Materials stock has doubled this year, while KLA Corp. (KLAC) is up 62.3% and Lam Research (LRCX) is up 90%.

On Stocktwits, retail sentiment for AMAT dipped in recent days and was ‘neutral’ on Tuesday, with traders linking gains in AMAT and peers KLA Corp. and Lam Research to Micron's upcoming quarterly report.

“Bullish prelude to Micron's $MU future Earnings are already here. Semi equipment names related to Micron's capex - $AMAT $KLAC $LRCX  were all trending down. But recently all of them together got above all moving averages and trending up,” a trader said.  

“Certainly a strong indication that Micron's sustained demand and earnings are going to be good.” 

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