Key Takeaways
- B. Riley cut its Applied Materials price target to $475 from $700 on Nov. 9 and kept its Buy rating, leaving 28% upside from that day’s close.
- The stock closed 49% below its June 30 record, yet analysts’ fiscal 2027 earnings estimates have risen over the past three months.
- On fiscal 2028 estimates, $475 works out to 20x earnings, just under Applied’s five-year average of 21x. The $628 Street average needs 26x.
- B. Riley’s lower target is the easier one to reach, and Applied’s Nov. 12 report is the next test.
Applied Materials (AMAT) closed 49% below its June 30 record on Nov. 9, and one of its bulls has just lowered the bar. B. Riley analyst Craig Ellis cut his price target to $475 from $700 that day and kept his Buy rating.
The stock jumped 11% on the same day to close at $370, so even the lower target leaves 28% upside.
AI Spending Worries, Then the Midterms
At an Oct. 13 investor event, Applied declined to give a specific forecast for wafer fab equipment spending, and the stock fell 7% that day. Chip-equipment stocks kept sliding on worries about AI spending. Then AI stocks sold off after Democrats’ midterm gains, and Applied fell 15% last week as the chip rout deepened.
B. Riley Lowered the Bar and Kept Its Buy
Ellis made the cut ahead of Applied’s fiscal fourth-quarter report on Nov. 12. At $475, his target sits 24% below the $628 Street average.
The business hasn’t given the bulls much reason to cut. Third-quarter revenue rose 25% to a record $9.12 billion, and Applied guided fourth-quarter revenue to $10.25 billion, which would be up 51% from a year earlier. CEO Gary Dickerson said in the third-quarter release: “Based on the increased demand visibility we are receiving from our customers, we expect another strong growth year for Applied Materials in 2027.”
Does $475 Add Up for Applied Materials?
Analysts’ average target was $628 on Nov. 2, up from $222 a year earlier, even after the stock’s slide from its June high.
Earnings estimates have held up too. Analysts expect normalized EPS of $18.56 for the fiscal year ending October 2027, up from $17.00 three months ago, and $23.89 for fiscal 2028.
What fell was the multiple. Applied traded at 49x forward earnings on June 30 and 19x on Nov. 6. Monday’s jump took it back to 21x, right at its five-year average.
A 12-month target should be measured against the earnings a year out. On fiscal 2028 estimates, B. Riley’s $475 is 20x, a touch below today’s multiple, so it needs no re-rating, only for the estimates to hold. The $628 average works out to 26x: above the five-year average, though below the 31x Applied averaged in the year to Oct. 22.
TIKR Tracks 41 Analysts on Applied Materials. How Many Say “Buy”?
See the full breakdown of Buy, Hold, and Sell ratings on Applied Materials, along with Wall Street’s revenue and earnings estimates, all in one place. More than 500,000 investors use TIKR to research stocks like this one. See Applied Materials’ Analyst Ratings
Why the Lower Applied Materials Target Is the Likelier One
The risk sits in those estimates. Two customers supplied 34% of Applied’s revenue in the first nine months of fiscal 2026, according to its latest 10-Q, so if either cuts spending, the whole business feels it. Equipment booms have ended that way before: revenue fell 13% in fiscal 2019, and the forward multiple dropped to 8.2x at the October 2018 quarter-end.
B. Riley’s $475 is the more believable number. It asks investors to keep paying today’s multiple for earnings analysts already expect, while $628 needs them to pay up again. The first read comes on Nov. 12: fourth-quarter revenue against the $10.25 billion guide, and what Applied expects from its 14-week first quarter of fiscal 2027.
So What Is Applied Materials Stock Actually Worth?
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