Morgan Stanley upgraded shares of Applied Materials , saying it’s more confident in the semiconductor Wafer Fab Equipment market and that the company’s base case is moving closer to the investment bank’s bull case. The chip equipment maker rose more than 1% premarket Monday after Morgan Stanley hiked its investment opinion to overweight from equal-weight. Applied Materials has jumped more than 16% year to date, outperforming the S & P 500. “Over the last few weeks memory pricing trends have clearly improved and we believe 2026/2027 memory capex expectations have risk skewed to the upside,” Morgan Stanley said in a note. AMAT YTD mountain Applied Materials year to date Morgan Stanley also lifted its 12-month price target on Applied Materials almost 22%, to $209 (from $172), implying 10% upside from Friday’s close of $190.10. The bank noted that Applied Materials trades at a significant discount to rival Lam Research . “AMAT currently trades at a 25% discount to LAM vs 10% average since 2023, and our new PT implies a 15% discount,” Morgan Stanley said. “With a 3:1 bull:bear skew, the most leverage to greenfield DRAM in our coverage, and our view that China, ICAPS, and leading edge logic are derisked, we think risk reward is skewed to the upside.”
