Citi massively revamps Applied Materials stock price target

If you've ever wondered who makes the machines that physique the chips powering artificial quality (AI), Applied Materials (AMAT) is simply a bully spot to commencement your education. It doesn't marque chips. But it manufactures the instrumentality that enables chipmaking, and close now, the satellite can't get capable of both.

Citi expert Atif Malik reset AMAT's terms target. And buried wrong his investigation was thing bigger: a chaotic paper involving Tesla (TSLA) and SpaceX that Malik says could adhd tens of billions of dollars successful instrumentality request that isn't adjacent successful his basal lawsuit yet.

Applied Materials CEO Gary Dickerson had already signaled the company's momentum. "The request for higher show and much energy-efficient chips is driving precocious maturation rates for leading-edge logic, high-bandwidth memory, and precocious packaging," helium said successful a institution connection during the archetypal 4th 2026 net release. "These are areas wherever Applied is the process instrumentality leader."

AMAT shares were up implicit 1.5% successful premarket trading connected Wednesday, May 13,  aft the upgrade.

Citi upgraded AMAT's banal terms people to $520 from $420

Citi expert Atif Malik raised his terms people connected AMAT to $520 from $420 connected Tuesday, May 12, citing a surge successful wafer fab instrumentality (WFE) spending that helium expects to accelerate done 2027, according to SEMI.

Malik's upgrade rests connected a top-down model linking hyperscale information halfway superior expenditure (capex) straight to WFE demand. His bull lawsuit numbers are significant.

• 2026 WFE bull case: $145 billion

• 2027 WFE bull case: $190 billion

• CY27 silicon gross maturation estimate: 31% twelvemonth implicit year

• Updated CY27 EPS estimate: $15.72, up 12% from anterior estimates
  Source: Seeking Alpha

According to the note, Malik besides expanded AMAT's valuation aggregate from 30 times to 33 times price-to-earnings (P/E), reflecting "extending WFE walk visibility" and favorable end-market mix, peculiarly successful DRAM and front-end of enactment (F/L) spending successful 2026 and 2027.

My reappraisal of the information suggests AMAT's aggregate enlargement is already telling a story. The stock's P/E has moved from 23 times to 27 times twelvemonth to date, according to the Citi note, meaning the marketplace was already repricing the banal earlier Malik formalized it.

AMAT is up 68% twelvemonth to day and 158.98% implicit the past year, according to Yahoo Finance information arsenic of May 12, 2026. The S&P 500 is up 8.11% and 26.64% implicit those aforesaid periods.

The Terafab chaotic paper that isn't successful anyone's exemplary yet

Here's wherever the communicative gets genuinely interesting. In March 2026, Tesla and SpaceX unveiled plans for a spot manufacturing installation called Terafab, targeting leading-edge 2-nanometer (nm) chips and designed to yet enactment up to 1 terawatt of compute capableness annually, according to TheStreet.