Applied Materials rises 10% after KeyBanc lifts target to $750

Applied Materials shares climbed more than 10% Monday after KeyBanc Capital Markets raised its 12-month price target to $750 while maintaining an Overweight rating. The firm flagged unusually high investor expectations across the company’s main businesses ahead of fiscal third-quarter results.

KeyBanc increased the target by $200 and said further share gains will depend on earnings beats on key metrics, guidance above consensus and upbeat management commentary. The firm cautioned that any actual or perceived disappointment could prompt sharp downside moves, noting a similar pattern in the prior quarter.

Investor attention followed Applied’s June 25 DRAM and Advanced Packaging Master Class, where management outlined new chipmaking systems intended to speed DRAM output and advance packaging for AI chips. Management described a ‘memory wall’ constraining AI compute performance and projected semiconductor industry revenue could reach $1 trillion this year.

Several brokerages raised price targets after the presentation. Jefferies moved its target to $770 from $510, B. Riley to $790 from $550, Wells Fargo to $740 from $715, and Bank of America to $720 from $540. Those firms maintained Buy or Overweight ratings.

Applied provided fiscal third-quarter guidance of about $8.95 billion in revenue and non-GAAP earnings per share of $3.36, implying roughly 36% year-over-year earnings growth. Analysts and investors have adjusted positions ahead of the earnings release.

Sector indicators include a peer’s recent results pointing to rising AI-driven memory demand and industry estimates that the AI infrastructure buildout could expand the market opportunity toward $3 trillion by 2029 and above $3.5 trillion by 2030.

KeyBanc warned that the stock’s near-term performance is closely tied to the upcoming quarterly report and management’s outlook, and that outcomes short of current expectations could produce significant volatility.