Applied Materials
’ earnings beat and upbeat outlook gave Wall Street cause to believe that the chip equipment maker’s strong rally can keep going.
The shares, which climbed 7.1% to $ $200.93 after the open Friday, enjoyed a flurry of price target hikes from analysts Friday. Wall Street is bullish on the stock, with 65% of analysts rating it Buy, according to FactSet data.
Applied’s CEO Gary Dickerson said the company was positioned at key inflection points in the chip industry and was set to continue to outperform “as customers ramp up next-generation chip technologies” critical to artificial intelligence, in the earnings release.
J.P. Morgananalyst Harlan Sur appeared to agree with that assessment as he raised his price target to $230 from $170 and maintained an Overweight rating. He said Applied was well-positioned to benefit from “multiple technology inflections that should drive outperformance” over the next several years.
He isn’t the most bullish—Needham analyst Charles Shi sees it reaching $240, while B Riley Securities’ Craig Ellis has a $250 target.
Citi
analyst Atif Malik, who also has a Buy rating, hiked his price target to $211 from $170. Malik said he likes Applied’s “balanced exposure to key equipment megatrends,” such as GAA, or Gate-All-Around architecture and advanced packaging technology.
But not everyone was quite so bullish. KeyBanc analyst Steve Barger said he wasn’t inclined to chase the stock higher “as it may take time for results to grow toward embedded expectations.” He has a Sector Weight rating on the stock.
“We think shares are already reflecting a robust cyclical inflection, which is not yet fully apparent,” he added.
Nvidia
rose in early trading Friday but other chip stocks were in the red, including
Texas Instruments,
Intel,
Micron Technology
and
NXP Semiconductors.
Applied was a notable outperformer.
The stock has been on a tear recently, rising 63% over the past year through Thursday’s close and up 16% so far in 2024. Friday’s jump may eventually prompt questions over how much more room it has to run, but that’s a worry for later down the line.
Write to Callum Keown at [email protected]
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