TLDR
- Applied Materials launched a suite of new chipmaking systems targeting 3D chip architectures for AI applications.
- The company reported Q2 EPS of $2.86, beating estimates of $2.68, with revenue of $7.91 billion versus $7.68 billion expected.
- Wells Fargo and Bank of America both raised price targets to $715 and $720 respectively, maintaining bullish ratings.
- AMAT stock opened at $586.54 on Thursday, with a 12-month range of $154.46 to $641.18.
- Insiders sold roughly 199,767 shares worth over $114 million in the last three months.
Applied Materials (AMAT) unveiled a new lineup of chipmaking systems on June 25, targeting the 3D chip architectures that power AI hardware. The stock opened at $586.54 on Thursday, up 0.53% on the day, and has delivered a 224% return over the past year.
The announcements cover multiple steps in the chip manufacturing process, from memory to advanced packaging.
The updated Centura Prime Epi system grows doped silicon germanium and silicon phosphorous in DRAM peripheral transistors. It comes with a 20% smaller footprint than its predecessor.
Three new systems target advanced packaging. The Opta Quad CMP platform adjusts in real time during wafer polishing to improve uniformity. It is aimed at hybrid bonding applications where copper wiring from two chips is fused together.
The Nokota VMax 2 handles copper plating for through-silicon vias and microbump formation in 3D stacking. It uses Adaptive Pattern Tuning to adjust the electric field during plating.
The Producer Avila 2 deposits dielectric films around through-silicon vias in ultra-thin DRAM dies and supports 12-layer and 16-layer high bandwidth memory stacking.
“The transistor and materials technologies that drove performance gains in leading-edge logic are now becoming essential in DRAM,” said Dr. Prabu Raja, President of the Semiconductor Products Group.
Two New Electron Beam Systems
Applied Materials also introduced two electron beam tools for advanced packaging inspection. The VeritySEM 7AP measures features on substrates used in HBM and chiplet designs with sub-10 nanometer sensitivity. The SEMVision G7AP reviews and classifies defects across silicon, organic, and glass substrates, and is already in production at memory and logic manufacturers.
The company is also planning a 25% workforce increase in Southeast Asia, adding roughly 1,000 workers primarily in Singapore.
Analyst Upgrades and Earnings Beat
The product launch follows a strong earnings report. Applied Materials posted Q2 EPS of $2.86 against a $2.68 consensus, with revenue of $7.91 billion beating the $7.68 billion estimate. Revenue was up 11.4% year over year.
Q3 2026 EPS guidance was set at $3.16 to $3.56. Full-year EPS is forecast at $12.10.
Wells Fargo raised its price target to $715 from $520, keeping an Overweight rating. Bank of America lifted its target to $720 from $540 with a Buy rating. Citigroup went to $710 from $550, also with a Buy.
Of 35 analysts covering the stock, 27 rate it a Buy and 8 a Hold. The average target price sits at $501.26, below where the stock is currently trading.
Not everyone is fully on board. Morgan Stanley kept an Equal Weight rating with a $502 target, and some analysts have flagged that AMAT’s valuation looks stretched after its strong run.
On the insider side, SVP Omkaram Nalamasu sold 24,263 shares on June 16 at an average of $593.43, totaling around $14.4 million. Insiders have sold roughly $114 million worth of stock over the last three months.
The SEMVision G7AP is already in active production use at memory and logic manufacturers, according to Applied Materials.
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