Applied Materials, Inc. (NASDAQ: AMAT) continues to benefit from strong semiconductor demand and disciplined execution. The stock trades near $236/share, up about 24% over the past year, supported by steady margins and robust cash generation.
The company is scheduled to report fiscal Q4 2025 results in mid-November 2025. In the prior quarter, the company exceeded expectations on both revenue and earnings, reflecting solid demand for advanced chipmaking tools. Earlier in 2025, the board approved a new $10 billion share repurchase authorization and announced plans to streamline operations and expand capacity for next-generation wafer equipment. These updates show management’s continued confidence in the long-term strength of the semiconductor industry.
This article explores where Wall Street analysts expect Applied Materials to trade by 2027, based on consensus targets and TIKR’s Guided Valuation Model. These figures reflect current analyst expectations and are not TIKR’s own forecasts.
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Analyst Price Targets Suggest the Stock Is Fairly Valued
Applied Materials trades near $236/share today. The average analyst price target is $218/share, which implies the stock is slightly overvalued at current levels. Forecasts show a tight range, reflecting cautious sentiment among analysts:
- High estimate: ~$265/share
- Low estimate: ~$160/share
- Median target: ~$215/share
- Ratings: 20 Buys, 3 Outperforms, 13 Holds, 1 Sell
Most analysts view Applied Materials as fairly valued following its strong performance this year. For investors, that means the market already reflects optimism around AI-related chip demand and solid margins. Without a major earnings surprise or industry tailwind, the stock is expected to trade close to its current price over the next year.
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Applied Materials: Growth Outlook and Valuation
The company’s fundamentals appear solid, but much of that strength already looks priced in:
- Revenue is projected to grow around 5% annually through 2027
- Operating margins are expected to stay near 30%
- Shares trade at roughly 19x forward earnings
- Based on analysts’ average estimates, TIKR’s Guided Valuation Model using a 19x forward P/E suggests a target price of about $221/share by 2027
- That implies a total decline of about 6%, or roughly (3%) annualized returns
These numbers suggest Applied Materials should continue to generate healthy profits and cash flow, but the valuation already reflects those strengths. For investors, the stock looks like a steady hold rather than a growth story, with returns likely tracking earnings rather than multiple expansion.
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What’s Driving the Optimism?
Applied Materials continues to benefit from its leadership in semiconductor manufacturing equipment. The company plays a critical role in advanced chip production for AI, cloud computing, and high-performance electronics. Its strong relationships with major chipmakers and long-term service agreements provide recurring revenue and predictable cash flow.
Management’s focus on innovation in wafer fabrication and materials engineering positions AMAT to capture growth from next-generation technologies. For investors, these strengths suggest Applied can maintain high margins and steady free cash flow even as the broader semiconductor market cycles through ups and downs.
Bear Case: Slower Growth and Valuation Pressure
Despite its strengths, Applied’s valuation looks full given current expectations. The stock trades near 19x forward earnings, roughly in line with its historical average, which implies the market already expects steady profitability. If chip demand moderates or capital spending slows, earnings growth could flatten, leaving limited room for multiple expansion.
Competition from peers like Lam Research and Tokyo Electron also poses a risk, especially if pricing pressures or order delays emerge in 2026–2027. For investors, the main concern is that AMAT’s high-quality fundamentals may not be enough to drive further gains if industry growth normalizes.
Outlook for 2027: What Could Applied Materials Be Worth?
Based on analysts’ average estimates, TIKR’s Guided Valuation Model using a 19x forward P/E suggests Applied Materials could trade near $221/share by 2027. That represents about a 6% total decline from today’s price, or roughly (3%) annualized returns.
While this points to muted upside, it reflects analysts’ view that AMAT is in a stable but fully valued position. To unlock stronger gains, the company would need to outperform expectations through higher AI-related demand, stronger margins, or faster adoption of next-generation process tools.
For investors, Applied Materials remains a steady long-term compounder with consistent cash flow and strong execution. However, near-term returns may be modest as the market consolidates after a strong multi-year rally.
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