Applied Materials (AMAT) laid out long-term financial targets that appear "conservative" yet supported by strong demand trends and the company's leadership in fast-growing technology segments, RBC Capital Markets said Tuesday in a report.
Applied Materials is positioned to grow faster than overall semiconductor-equipment spending through 2030, helped by its exposure to advanced logic, DRAM and high-bandwidth memory, where demand is being lifted by AI-driven capacity needs, the report said. Industry spending is expected to rise at roughly a 19% compound annual rate between 2025 and 2030, and Applied Materials should exceed that pace, RBC said.
The company's long-term margin targets, including a gross-margin goal of about 54% and operating margins around 40%, were characterized as cautious because Applied Materials already achieves higher margins in several systems businesses, the report said. These targets support a path to earnings per share of $25 to $30 by 2030, RBC said.
RBC highlighted Applied Materials' particularly strong position in DRAM, where spending is expected to grow faster than the broader industry due to ongoing shortages and technology migrations.
RBC reiterated its outperform rating on Applied Materials stock with a $600 price target.
Price: 451.89, Change: -12.35, Percent Change: -2.66
Comments