AprQ25 Beat/Raise: Unprecedented Visibility. Reiterate Top SCE Pick

Research evidence excerpt

AprQ25 Beat/Raise: Unprecedented Visibility. Reiterate Top SCE Pick

Technology | Semiconductors and Semiconductor Equipment

May 15, 2026

Applied Materials, Inc. Mark Lipacis Vedvati Shrotre, CFA 214-459-4007 415-800-0187

AMAT | $440.56 Mark.Lipacis@evercoreisi.com Vedvati.Shrotre@evercoreisi.com

Outperform | Target Price/Base Case: $515.00 (from

$480.00)

Earnings Report

AprQ25 Beat/Raise: Unprecedented

Company Statistics

Visibility. Reiterate Top SCE Pick 52-Week Range $153.47 - $448.45

Market Capitalization (B) $350 AMAT Beat & Raised and expects 2026 semi system revs to grow

Enterprise Value (B) $348 >30% vs. prior est of >20% YY growth, driven by strength in leading-

Dividend Yield 0.5% edge F&L, AP and DRAM markets. This aligns with our preview “We're

Net Cash/Share $(1.66) Buyers” and our view that Agentic AI is DRAM and NAND intensive (see

Shares Outstanding (M) 794 note) and we expect DRAM WFE to inflect meaningfully in 2026,

growing 63%/46% in 2026/2027 & NAND to follow. At 34x NTM EPS,

AMAT has the lowest P/E in our SCE coverage, and a 13% discount to

Earnings Summary large-cap SCE peers ASML/LRCX and KLAC. We expect this valuation

2025 2026E 2027E gap to narrow, as WFE accelerates through 2027 and AMAT benefits

Revenue (M) Q1 $7,100 $7,910 $10,510 from acceleration in DRAM + HBM and leading-edge F&L spend. AMAT

Q2 $7,302 $8,950 $11,077 remains a top SCE pick - Reiterate Outperform

Q3 $6,800 $9,528 $11,676

Q4 $7,012 $9,985 $12,082 Raised 2026 Rev Outlook. Mgmt. expects 2026 system rev growth

CY $28,214 $36,372 $45,346 >30% vs. prior >20%, though cleanroom constraints cap rev growth.

Cons Revenue (M) Q1 $7,100 $7,683 $9,573 Demand strength expected to continue into 2027

Q2 $7,302 $8,139 $9,950