FINWIRES · TerminalLIVE
FINWIRES

Applied Materials Visibility Extends Into 2027 Amid Strong Demand Trends, RBC Says

By

Applied Materials (AMAT) appears well-positioned given its leading position in DRAM and advanced logic, as well as exposure to new technologies such as gate-all-around, backside power delivery and 4F2, RBC Capital Markets said.

Fiscal Q3 guidance for revenue and earnings per share of $8.95 billion and $3.36 at the midpoint was well ahead of consensus and RBC estimates, with visibility extending to eight quarters and commentary pointing to 2027 being another strong growth year, according to the note Thursday.

RBC lifted its fiscal 2026 EPS estimate to $12.15 from $10.99 and its fiscal 2027 estimate to $15.77 from $13.58.

Applied Materials has a strong position in advanced logic and advanced packaging and also benefits from generative AI demand. The transition to GAA has been a core driver, and RBC expects Taiwan Semiconductor's (TSM) adoption of backside power to be a tailwind in the second half of 2026.

Management also lifted its longer-term Services growth forecast to mid-teens from low-teens due to the growing installed base and customer adoption of AI-enabled optimization solutions, the brokerage said.

RBC maintained an outperform rating on Applied Materials and raised the price target to $520 from $500.

Price: $433.00, Change: $-7.56, Percent Change: -1.72%

Related Articles

Australia

Vertiv Could See Upside to 2030 Targets as 'Hyper-Growth' Continues, RBC Says

Vertiv Holdings (VRT) could see upside to its 2030 targets, with investments in new platforms and manufacturing capacity keeping the company in "hyper-growth mode," RBC Capital Markets said in a Thursday note.RBC estimates Vertiv growing its topline by at least 20% to 25% organically through 2030, yielding a compound annual growth rate of over mid-to-high 20s for earnings per share, according to the note.Hyperscalers' capital expenditures are expected to drive the company's potential growth, with 12 years of implied US datacenter construction backlog maintaining the sector's dynamic of demand outstripping supply, RBC said.Vertiv is expected to feature its datacenter power/cooling technology for data center architecture at its upcoming investor meeting, the investment firm added.RBC raised its price target on Vertiv to $435 from $356, with an outperform rating.Price: $365.76, Change: $-10.48, Percent Change: -2.78%

$VRT
Australia

Forgent Power to Gain From Data Center, Grid Demand, Oppenheimer Says

Forgent Power Solutions (FPS) is expected to benefit from stronger data center and grid demand, larger customer orders, longer backlog coverage and better operating leverage in fiscal 2027 and 2028, Oppenheimer said in a note Friday.The firm said Forgent Power's ability to customize products, add capacity quickly and sell more across its customer base should support faster growth as customer spending is rising, with average spending over the past 12 months up 20% from the previous quarter to $1.5 million, and management expects average order size to keep growing.Backlog visibility has improved to a range of 12 to 15 months from 9 to 12 months as customers engage earlier and place longer-cycle orders, while margin gains should continue, helped by lower selling, general, and administrative expenses as a share of sales, better volume absorption, and a more favorable product mix, Oppenheimer said.Forgent Power raised its fiscal 2026 revenue guidance to $1.35 billion to $1.39 billion and adjusted earnings before interest, taxes, depreciation, and amortization guidance to $310 million to $320 million, both above prior guidance, according to the note.Oppenheimer kept Forgent Power's outperform rating and increased the price target to $60 from $43.Price: $46.51, Change: $-3.69, Percent Change: -7.34%

$FPS
Australia

Keysight Likely to Post Stronger Fiscal Q2 Growth on AI, Aerospace Demand, Morgan Stanley Says

Keysight Technologies (KEYS) could deliver stronger-than-expected fiscal Q2 growth as demand tied to artificial intelligence data centers and aerospace and defense markets continues to "strengthen," Morgan Stanley said in a report Friday.The investment bank said recent results from Viavi Solutions (VIAV) and Anritsu reinforced positive trends in AI networking, data center testing and aerospace and defense demand ahead of Keysight's fiscal Q2 earnings report, according to the report.Keysight is scheduled to release its Q2 financial results, after the close of the stock market on May 19.Investors are "likely expecting" fiscal Q2 orders of about $1.71 billion to $1.72 billion and revenue near $1.75 billion, though orders could come in slightly lower at roughly $1.68 billion to $1.70 billion because of the timing of a large aerospace and defense deal, "that may make sequentials more challenging," the report said.Keysight may need to exceed revenue expectations by about $50 million and raise full-year guidance closer to 25% growth to "sustain momentum," Morgan Stanley said.Morgan Stanley has an equal weight rating on Keysight Technologies and raised its price target to $305 from $268.Price: $351.76, Change: $-9.80, Percent Change: -2.71%

$KEYS$VIAV