How Applied Materials Could Become the Next $1 Trillion Chip Stock Omor Ibne Ehsan Wed, June 24, 2026 at 8:02 AM PDT 4 min read AMAT C Applied Materials (AMAT) is among the handful of companies that are building the incredibly complex machines that allow foundries to turn bare silicon wafers into advanced processors. It has thus surged massively over the past few years and has a market capitalization close to half a trillion dollars as of this writing. Citi recently doubled down on AMAT stock, plus some competitors that are doing equally as well. It's worth taking a closer look at these stocks since they are likely to keep surging. Chip demand has shown no sign of slowing down, and analysts are racing to bump price targets. If the rally continues, these AI-adjacent stocks may be the next category to cross the $1 trillion mark and beyond. More News from Barchart Ahead of Micron Earnings, Here's What Barchart Data Says Comes Next for MU Stock Huge, Unusual In-the-Money Call Option Volume in Intel Stock Today Shows Investors Bullish Stock Index Futures Plunge as Tech Selloff Rages On, U.S. PMI Data in Focus Get exclusive insights with the FREE Barchart Brief newsletter. Subscribe now for quick, incisive midday market analysis you won't find anywhere else. www.barchart.com A Slew of Price Target Hikes A wave of aggressive price target hikes for Applied Materials is coming through after a blockbuster Q2 2026 earnings report last month. Analysts are finally warming up to the business due to back-to-back solid earnings reports and what seems to be a very long growth runway. Applied Materials' guidance suggests more than 30% growth for the broader semiconductor equipment industry this year, and Wall Street is quickly recalibrating. Citigroup hiked AMAT stock's price target from $550, all the way to $710, with other major institutions doing the same. Bank of America hiked from $540 to $720, and Wells Fargo hiked from $520 to $715. Others are also catching up, albeit more slowly, and are $100-$150 behind on their price targets. Note that the numbers below don't yet capture the BofA's hike due to its recency. The mean price target is likely near $600 now. www.barchart.com More Hikes are Likely Here's Why The historical "boom and bust" cycle of the semiconductor equipment industry is being re-evaluated. Analysts increasingly view AI infrastructure build-outs, and the cleanroom expansions required to support them, as a sustained cycle. We are already over three years into the AI hype, and things have only gotten better for AI companies. Hence, the argument that this is a short-lived cyclical pump is waning. Moreover, Applied Materials is now a high-margin business. A little more than a decade ago, you were looking at net margin in the 1-3% range. Now, it's at 35.5% as of Q1. Wall Street loves a business that has both high sales growth and high margins. Story Continues The explosion in demand for High-Bandwidth Memory (HBM) is key for AI GPUs. Applied Materials dominates...
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