Needham & Company upgraded Applied Materials (NASDAQ: AMAT) from Hold to Buy with a price target of $22.00.

Analyst Y. Edwin Mok commented, "We are upgrading AMAT from a Hold to a Buy as we believe the drivers are now in place to deliver profitable growth ahead. Yesterday's F1Q16 (Jan) report was highlighted by the substantially higher guidance. We believe AMAT's strategy and efforts to drive growth in the Silicon, Display and AGS businesses are finally starting to yield results, even with limited industry growth ahead. With improving gross margins and good cost control ahead, we now expect the model to deliver strong, double-digit-% earnings growth in 2-3 years, even though it is trading largely in line with other large-cap Semi names. We would be buyers of AMAT for the strengthened positions in multiple areas and the earnings growth that we see ahead."

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Shares of Applied Materials closed at $17.17 yesterday.