Applied Materials NASDAQ:AMAT received a higher price target from HSBC after the brokerage raised its outlook for the global wafer fabrication equipment market, citing stronger long-term demand for semiconductor manufacturing tools.
HSBC maintained its Buy rating on Applied Materials and increased its price target to $683 from $522. The firm said its more optimistic industry outlook follows expectations that chipmakers will continue expanding manufacturing capacity over the next several years, supported by rising investment in advanced semiconductor production.
The brokerage also lifted its 2028 forecast for the wafer fabrication equipment market to $272 billion from $261 billion. The revision came after ASML indicated plans to expand production capacity for its extreme ultraviolet and argon fluoride immersion lithography systems, suggesting equipment demand could remain stronger than previously expected through 2028.
HSBC said the updated industry forecast supports higher earnings expectations for Applied Materials ahead of the upcoming reporting season. The firm added that consensus estimates may still have upside potential as chip equipment spending continues to benefit from demand tied to advanced semiconductor manufacturing and artificial intelligence infrastructure.