Applied Materials (AMAT) posted robust systems shipment growth in fiscal Q3, but the company's guide for flat sequential October-quarter gross margin growth reflects mix headwinds and accelerating employee hiring, Morgan Stanley said in a Friday research report.
Morgan Stanley lowered its 2026 systems shipment growth forecast to 42% from 44%, the analysts said.
Despite DRAM and 3-nanometer logic being material growth drivers in 2026, the investment firm said that the company's outgrowth versus wafer fab equipment looks narrower than expected, according to the note.
Morgan Stanely reiterated its equalweight rating on the stock and adjusted its price target to $642 per share from $646.
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