UBS is adopting a more bullish stance on Applied Materials . The bank upgraded the semiconductor equipment maker to buy from neutral. Analyst Timothy Arcuri also lifted his 12-month price target to $285 from $250, which points to upside of 23% from Monday’s close. Arcuri pointed to a “significant more bullish outlook” for wafer fab equipment, or WFE, over the next two years. Wafer fab equipment is used to process raw semiconductor wafers into microchips. AMAT YTD mountain AMAT YTD chart Rising demand for memory means that Arcuri now expects WFE to increase more than 20% year-over-year to $136.5 billion in 2026. This number could approach $145 billion in 2027, a level “well above current Street expectations,” Arcuri said. “Importantly, within our coverage universe, AMAT stands out as the largest beneficiary of this DRAM spending surge,” the analyst wrote. “In addition, we believe the company — and the broader industry — is underestimating the strength of China’s WFE demand in 2026, which we view as another source of upside and a meaningful tailwind for AMAT.” While the company’s execution has faltered recently due to WFE share loss, Arcuri believes that re-doubled efforts in China and improved expectations from management should help the company regain some share over the next two years. Both 2026 and 2027 should be very strong years for the wafer fab equipment business, he added. Shares of Applied Materials have surged 42% this year and gained nearly 2% in the premarket following the upgrade. Most analysts are bullish on Applied Materials. LSEG data shows 21 of 34 analysts covering the stock rate it a buy or strong buy.
