On Friday, Goldman Sachs (NYSE:GS) reiterated its Buy rating on Applied Materials (NASDAQ:AMAT) stock, with a price target set at $240.00. The firm's assessment follows Applied Materials' financial results for the third fiscal quarter ending in July, which surpassed expectations.
The company also projected growth for the fourth fiscal quarter ending in October, attributing the positive outlook to increased demand in leading-edge Logic/Foundry and High-Bandwidth Memory sectors. This growth is expected despite a predicted revenue normalization in China.
The firm acknowledged that concerns over potential new export restrictions could impact valuation multiples in the semiconductor sector. However, Goldman Sachs expressed a positive stance on Applied Materials' growth trajectory through 2025 and beyond.
This optimism is based on the company's involvement in critical technology advancements such as Gate-All-Around transistors, Backside Power Delivery, and Advanced Packaging (NYSE:PKG).
Goldman Sachs anticipates that Applied Materials' extensive product and technology portfolio will enable the company to capture more value, reflected in higher gross margins over time. The firm also foresees robust operating expense leverage and significant operating margin expansion for Applied Materials.
In summary, Goldman Sachs' endorsement of Applied Materials remains firm, with expectations of the company's continued growth and financial strength in the semiconductor industry, maintaining the $240 price target for the stock.
In other recent news, Applied Materials reported strong third fiscal quarter results, with revenues of $6.778 billion and earnings per share (EPS) of $2.12, surpassing the Street's expectations. Bernstein raised its price target for the company to $250, maintaining an Outperform rating. The company's fourth fiscal quarter guidance is roughly in line with expectations, projecting revenues of approximately $6.93 billion and an EPS of $2.18.
Deutsche Bank (ETR:DBKGn) adjusted its price target for Applied Materials to $230, acknowledging the company's robust financial results and modest increase in revenue and gross margin estimates. Evercore ISI kept an Outperform rating with a price target of $260, expressing confidence in the company's financial performance and potential for growth.
Citi maintained its Buy rating on Applied Materials, with a price target of $240, highlighting the company's robust demand driven by AI and expectations of maintaining revenue from gate-all-around technology. Cantor Fitzgerald adjusted the price target for Applied Materials shares to $250 from a previous $290, maintaining the Overweight rating.
Applied Materials also introduced a series of materials engineering innovations aimed at improving the performance-per-watt of computer systems and announced a 25% increase in its quarterly cash dividend, raising it from $0.32 to $0.40 per share. These are the recent developments involving Applied Materials.
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