Piper Jaffray analyst Shawn Lockman reiterated an Overweight rating and boosted his price target on Applied Materials (NASDAQ: AMAT) to $21.00 (from $20.00) following strong Q2 performance.

Lockman comments, "AMAT reported April '14 qtr sales of $2.35B (+7% q/q, cons. $2.35B) as Silicon segment revenues rebounded to $1.6B (+7% q/q). Overall book to bill was >1 as orders climbed 16% q/q to $2.6B driven by Silicon segment orders which benefited from DRAM (+261% q/q) and logic (+59% q/q). Display orders rebounded sharply, up 330% q/q to $340M on fab buildout in China. Non-GAAP gross margin of 44.2% was up 170bps q/q with gross margins expected to improve throughout the year. AMAT maintained guidance for 2014 WFE spending up 10-20% q/q, reflecting optimism on Foundry spending and 3D NAND spending. However, AMAT guided July '14 qtr revenues flat to down 5% q/q, in-line consensus."

The firm trimmed FY 2014 EPS from $1.18 to $1.08 and FY 2015 EPS was raised from $1.43 to $1.48.

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Shares of Applied Materials closed at $18.69 yesterday.