Applied Materials jumps after Citi raises target to $710

Applied Materials shares jumped 9.7% to $623.35 on Wednesday, reaching a 52-week high after Citi raised its price target to $710 from $550 and maintained a Buy rating.

The analyst revisions lifted peers. Citi increased Lam Research’s target to $450 from $315 and KLA’s to $290 from $206.40. Lam rose more than 5% and KLA nearly 3% in the same trading session.

Citi estimated the global wafer fabrication equipment market at about $145 billion this year, projecting it could reach $200 billion in 2027 and $250 billion in 2028. The bank forecast hyperscaler capital spending to increase 84% this year, then grow 56% in 2027 and 38% in 2028. Amazon, Microsoft, Alphabet, Meta Platforms and Oracle are expected to spend a combined more than $1.1 trillion in 2027, compared with roughly $650 billion this year.

In a note, Citi analyst Atif Malik wrote: “The rise of agentic AI is driving a structural increase in NAND demand as memory requirements surge and DRAM supply tightens.” He added that higher memory demand should support increased investment in fabs and semiconductor tools.

Applied Materials unveiled SENZ, an integrated ambient visual platform for next-generation AI-powered smart glasses that combines waveguide optics, sensing, vision correction, electronic dimming and a light engine into one system. The company said it will manufacture components with GlobalFoundries in Singapore, integrate compute with Qualcomm and pursue a long-term joint development agreement with EssilorLuxottica to commercialize augmented reality and AI-enabled eyewear.

The company reported record fiscal second-quarter 2026 revenue of $7.9 billion and earnings per share of $2.86, both above analysts’ estimates. Management raised its outlook for semiconductor equipment growth in 2026 from more than 20% to more than 30%.

Analyst upgrades, the SENZ announcements and the quarterly results occurred alongside the stock rally and gains across semiconductor equipment suppliers during the trading session.