TLDR
- Mizuho upgraded Applied Materials from Neutral to Outperform with a $370 price target, up from $275
- Global wafer fabrication equipment spending expected to rise 13% in 2026 and 12% in 2027
- TSMC’s capital expenditure forecast to increase 32% year-over-year to $54 billion in 2026
- Applied Materials could see $2 billion in additional revenue in fiscal 2026 and over $3 billion in fiscal 2027
- China revenue headwinds easing as spending accelerates in the U.S., Taiwan and Japan
Mizuho upgraded Applied Materials to Outperform from Neutral on Tuesday. The firm raised its price target to $370 from $275.
The upgrade comes as semiconductor equipment spending shows a sharper rebound than previously expected. Mizuho now projects global wafer fabrication equipment spending will grow 13% in 2026. The firm expects another 12% increase in 2027.
These numbers represent a faster pace than earlier forecasts. The acceleration creates upside for Applied Materials as the world’s second-largest supplier of chipmaking tools.
Applied Materials has strong exposure to the recovery. About 65% of the company’s revenue comes from foundry and logic customers. Another 29% is tied to DRAM production.
TSMC and Intel Drive Spending Higher
Taiwan Semiconductor Manufacturing sits at the center of the spending increase. Mizuho forecasts TSMC’s 2026 capital expenditure will jump 32% year-over-year to $54 billion. The brokerage expects further growth in 2027.
Intel also issued better-than-expected tool spending guidance. Demand for high-bandwidth memory adds another growth driver.
These trends support sales of Applied Materials’ advanced manufacturing platforms. The company supplies equipment for gate-all-around and backside power delivery technologies. It also provides tools for advanced packaging.
Mizuho raised its revenue estimates above Wall Street consensus. The firm sees roughly $2 billion in incremental sales for fiscal 2026. That figure grows to over $3 billion in fiscal 2027.
China Drag Lessens as Other Regions Accelerate
China remains a challenge for Applied Materials. However, the impact is decreasing as spending picks up elsewhere.
Mizuho estimates China revenue will drop about 4% in 2026. But revenue from other regions, which make up roughly 70% of sales, should grow faster.
The brokerage expects China’s share of global wafer fabrication equipment spending to fall to the mid-20% range over 2026 to 2027. This reduces China’s impact on overall growth.
Applied Materials benefits from strong demand in the U.S., Taiwan and Japan. These markets are accelerating their chip manufacturing investments.
The new $370 price target uses about 28.5 times projected 2027 earnings. Mizuho’s valuation reflects strong industry tailwinds despite near-term challenges in China and mature chip markets.
Get 3 Free Stock Ebooks
Discover top-performing stocks in AI, Crypto, and Technology with expert analysis.
- Top 10 AI Stocks - Leading AI companies
- Top 10 Crypto Stocks - Blockchain leaders
- Top 10 Tech Stocks - Tech giants
