AMAT stock: Mizuho sees 'significant acceleration' in WFE, upgrades rating

Investing.com -- Applied Materials received an upgrade from Mizuho on Wednesday, with the firm citing a sharp rebound in semiconductor capital spending and strengthening foundry and logic demand.

Analyst Vijay Rakesh upgraded the stock to Outperform from Neutral and lifted the price target to $370 from $275, arguing that AMAT is positioned to benefit from a “significant acceleration” in wafer fab equipment (WFE) spending through 2027.

Mizuho now expects WFE to rise 13 percent year over year in 2026 and another 12 percent in 2027, an outlook the firm described as a “significant acceleration versus our prior expectations.”

With AMAT generating about 65 percent of revenue from foundry and logic customers, the report highlights increased capital expenditure from TSMC and improving tool spending at Intel as major tailwinds.

TSMC’s capex from 2026 to 2028 is projected to be “significantly higher” than the 2023–25 period, with 2026 spending alone expected to jump 32 percent to $54 billion.

DRAM demand tied to high-bandwidth memory is also set to provide support, accounting for roughly 30 percent of AMAT’s revenue.

While China remains a headwind, Mizuho forecasts AMAT’s China revenue will fall 4 percent this year, the firm said ex-China markets, which make up about 70 percent of revenue, are accelerating faster. Strong AI-related demand is driving leading-edge investment in nodes below 2 nanometers.

Mizuho said global WFE growth is creating “strong tailwinds for all WFE suppliers,” prompting its upgrade and higher estimates for 2026 and 2027.

You May Also Be Interested In

• FTC files amicus brief challenging Amgen's Enbrel patent acquisition
• Jannik Sinner withdraws from U.S. Open due to knee injury
• Cummins (CMI) PT Lowered to $675 at Jefferies