This Analyst Sees 20% Upside For AMAT Stock – Says High Expectations Around Applied Materials’ Businesses Create Short-Term Risk

• KeyBanc believes that for AMAT's stock price to increase from current levels, investors will need to see beats on key metrics and guidance above consensus.
• Applied Materials' recent industry event reaffirmed Wall Street's view of the company's strong position.
• For Q3, analysts expect Applied Materials to earn $3.38 per share on revenue of about $9 billion.

Shares of Applied Materials (AMAT) caught investors’ attention on Monday after KeyBanc Capital Markets issued early commentary about expectations for the semiconductor equipment manufacturer’s third-quarter earnings.

At the time of writing, AMAT stock was up more than 5%.

KeyBanc’s Takeaway On AMAT Stock

More than a month before the third-quarter (Q3) results, KeyBanc highlighted the overly inflated hopes surrounding the company. The firm said expectations for AMAT’s semiconductor capital equipment, electronic manufacturing services, and outsourced semiconductor assembly and test businesses are higher than ever, increasing short-term risks around its results, according to TheFly.

For the company’s share price to rise from current levels, KeyBanc said investors will need to see beats on key metrics, guidance above consensus, and management commentary supporting continued positive out-year revisions. The firm is optimistic about the likelihood of positive outcomes, but also noted that any actual or perceived disappointment in results could trigger downside volatility, as seen last quarter.

KeyBanc maintained its bullish rating at ‘Overweight’ and hiked the price target by $200 to $750, implying an upside potential of roughly 20% from the stock’s previous closing price on Friday.

For Q3, analysts expect Applied Materials to earn $3.38 per share on revenue of about $9 billion, according to Fiscal AI.

AMAT’s Recent Industry Event Reaffirmed Wall Street’s Bull Thesis

Applied Materials recently hosted its 2026 DRAM and Advanced Packaging Master Class event, where the company forecast that semiconductor industry revenue would reach $1 trillion this year.

Meanwhile, B. Riley said AMAT is well-positioned for a sustained multi-year semiconductor equipment investment cycle and presents a “larger-than-expected long-term” investment opportunity, with potential to gain an even larger market share. Wells Fargo said the event reinforced its constructive view of the company’s deep product portfolio.

Cantor Fitzgerald stated in a recent note that the AI infrastructure buildout is helping the overall industry’s revenue expand faster than expected, only benefiting AMAT, with expectations of reaching roughly $3 trillion by 2029 and potentially exceeding $3.5 trillion by 2030.

What Retail Traders Think Of AMAT Stock

On Stocktwits, retail sentiment toward AMAT stock remained in ‘bullish’ territory over the last 24 hours.

AMAT stock has more than doubled in value so far this year and more than tripled over the past 12 months, outperforming the S&P 500, the Roundhill Memory ETF (DRAM), the VanEck Semiconductor ETF (SMH), and the iShares Semiconductor ETF (SOXX).

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