It was a good day for chip stock Applied Materials (NASDAQ:AMAT), which was up over 1% in this morning’s premarket trading. However, that didn’t last, and the stock is down nearly 3% as Friday afternoon’s session rolled on. It benefited from an upgrade at Needham, among other things, but it wasn’t the only one to get that nod.
Applied Materials got a boost from Needham, who noted that wafer fab equipment spending was on the rise. Those involved in making wafer fab equipment, like Applied Materials and Lam Research (NASDAQ:LRCX), would therefore benefit from such extra spending.
In fact, Needham looks for spending to stay fairly stable in 2024—sticking around the $90 billion level—but increasing to a hefty $100 billion in 2025. That allowed Needham to bump both Lam Research and Applied Materials from Hold to Buy ratings. But it wasn’t just Needham’s nod that gave Applied Materials a little extra—if only transitory—boost. Applied Materials also rolled out news about the new Sunnyvale business center that’s been in the making since last May. The move will put a new 600,000 square foot facility into Applied Materials’ portfolio, and represents a larger push to get more research and innovation going over the next decade.
Is Applied Materials a Buy or Sell?
Turning to Wall Street, analysts have a Strong Buy consensus rating on AMAT stock based on 17 Buys, three Holds and one Sell assigned in the past three months, as indicated by the graphic below. Furthermore, the average AMAT price target of $162.32 per share implies 15.02% upside potential.
