Mikey (As Well as the Rest of Us) Likes It!

Research evidence excerpt

Mikey (As Well as the Rest of Us) Likes It!

FE

guide today of ~$145B - $150B (+26-30% Y/Y). This compares to LRCX’s +27% ($140B) and TOELY’s +20% outlook

amongst process peers. While we had expected a raise to 25%+ heading into the print today (with AMAT growth

eventually closing the year at 32-34%), Applied is clearly taking even more share this year, led by excellent

leverage to the key growth areas in CY26 – namely, leading edge Foundry, greenfield DRAM, and Advanced

Packaging. We now see eventual Semi System growth for Applied approaching 40% when all is said and done

End Market Commentary Suggests Outperformance for CY26 and Beyond

 With AMAT having the #1 process equipment share in leading-edge F/L, DRAM, and Advanced Packaging, which

are expected to be the largest growth drivers in WFE in CY26, management is incredibly bullish on Applied’s

ability to outperform WFE. Specifically, mgmt. called out leading-edge F/L, DRAM and Advanced packaging

driving >80% of WFE growth in CY26 (with CY27 expected to have a similar growth profile). ICAPS is expected to

eventually start growing mid-to-high single digits, but with utilizations relatively lower today (especially

compared to leading-edge), growth is still expected to be more muted. AMAT raised its NAND bit forecast but

stressed that this is primarily driven by upgrades where the company does not participate at a high-level.

CY27 and Even CY28 Shaping up to Be Excellent Years

 AMAT’s largest customers are now providing the company with rolling 8-quarter forecasts and signaling that

CY27 will be another growth year. This results in AMAT highlighting the clearest and longest visibility it has ever

seen with the demand environment continuing to be strong for “a number of years.” We readily agree that