<div id="readability-page-1"><div><ul> <li>Multiple major brokerages have recently upgraded NasdaqGS:AMAT, pointing to a sharp pickup in semiconductor capital spending tied to AI.</li> <li>Analysts highlight wafer fabrication equipment as a key focus area, with Applied Materials seen as a key supplier to this part of the industry.</li> <li>Chipmakers such as TSMC and Intel are increasing capital expenditures, which is expected to feed into demand for Applied Materials’ tools and services.</li> <li>The wave of upgrades from firms including Mizuho and Deutsche Bank puts fresh attention on the company’s role in the global chip supply chain.</li> </ul> <p>Applied Materials builds the tools and equipment that chipmakers use to produce advanced semiconductors, so its fortunes tend to move with industry capital spending. The recent focus on AI computing has pushed chipmakers to invest in more capacity, and that has put suppliers like NasdaqGS:AMAT in the spotlight. For investors, the key link is simple: more capex at foundries can translate into more orders for equipment providers.</p> <p>What sets this news apart is that it centers on concrete spending plans from chipmakers rather than short term earnings debates. If AI related demand continues to influence chip fabrication plans, investors will likely keep a close eye on how Applied Materials’ order pipeline and product mix respond to that spending shift.</p> <p>Stay updated on the most important news stories for Applied Materials by adding it to your watchlist or portfolio. Alternatively, explore our Community to discover new perspectives on Applied Materials.</p> <figure><img height="476" src="https://imageproxy.pbkrs.com/https://images.simplywall.st/company/5a1ea4a8-2ba9-4ef4-9649-4669911af741/chart/quote-price?x-oss-process=image/auto-orient,1/interlace,1/resize,w_1440,h_1440/quality,q_95/format,jpg" width="746" original-src="https://imageproxy.pbkrs.com/https://images.simplywall.st/company/5a1ea4a8-2ba9-4ef4-9649-4669911af741/chart/quote-price"/><figcaption>NasdaqGS:AMAT 1-Year Stock Price Chart</figcaption></figure> <p>Why Applied Materials could be great value</p> <h2>Investor Checklist</h2> <h3>Quick Assessment</h3> <ul> <li><strong>❌ Price vs Analyst Target</strong>: At US$332.71, the share price is about 4.8% above the US$317.61 analyst consensus target.</li> <li><strong>❌ Simply Wall St Valuation</strong>: Shares are flagged as trading 138.1% above the estimated fair value.</li> <li><strong>✅ Recent Momentum</strong>: The 30 day return of 27.0% indicates strong short term momentum around the upgrade news.</li> </ul> <p>Check out Simply Wall St's in depth valuation analysis for Applied Materials.</p> <h3>Key Considerations</h3> <ul> <li>📊 Broker upgrades are tying Applied Materials directly to rising AI related wafer fab capex at names like TSMC and Intel, reinforcing its role in the equipment cycle.</li> <li>📊 Monitor how order intake, backlog and service revenue track semiconductor capex trends, especially given a P/E of 37.7x compared with the Semiconductor industry average of 42.0x.</li> <li>⚠️ The valuation model flags the stock as materially overvalued and there is a recorded risk of significant insider selling over the past 3 months.</li> </ul> <h3>Dig Deeper</h3> <p>For the full picture, including more risks and potential rewards, explore the complete Applied Materials analysis.</p> <p><em> This article by Simply Wall St is general in nature. <strong>We provide commentary based on historical data     and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice.</strong> It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your     financial situation. We aim to bring you long-term focused analysis driven by fundamental data.     Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.     Simply Wall St has no position in any stocks mentioned.</em></p></div></div>

On October 26th, after the U.S. stock market closed, chip giant Intel released its Q3 2023 financial report. The report showed that Intel's total revenue in the third quarter fell 8% year-on-year to $14.16 billion, marking the seventh consecutive quarter of declining sales, although it was still higher than the market expectation of $13.53 billion. In the second quarter, revenue had previously dropped 15% year-on-year, and the company expects revenue to return to growth in the fourth quarter. However, the sales of the Network and Edge Group (NEX), which includes IoT and other segments, fell 32% year-on-year to $1.5 billion. More importantly, the server chip division, named "Data Center and Artificial Intelligence," has yet to recover growth, with third-quarter revenue declining 10% year-on-year to $3.8 billion. Facing multiple competitive pressures, do you think Intel can turn the tide in the AI era?

<p><span style="background-color:rgb(255,255,255);color:rgba(0,0,0,0.9);">On October 26th, after the U.S. stock market closed, chip giant Intel released its Q3 2023 financial report. The report showed that Intel's total revenue in the third quarter fell 8% year-on-year to $14.16 billion, marking the seventh consecutive quarter of declining sales, although it was still higher than the market expectation of $13.53 billion. In the second quarter, revenue had previously dropped 15% year-on-year, and the company expects revenue to return to growth in the fourth quarter.</span></p><p> </p><p style="margin-left:0px;"><span style="background-color:rgb(255,255,255);color:rgba(0,0,0,0.9);">However, the sales of the Network and Edge Group (NEX), which includes IoT and other segments, fell 32% year-on-year to $1.5 billion.</span> More importantly, the server chip division, named "Data Center and Artificial Intelligence," has yet to recover growth<span style="background-color:rgb(255,255,255);color:rgba(0,0,0,0.9);">, with third-quarter revenue declining 10% year-on-year to $3.8 billion.</span></p><p style="margin-left:0px;"> </p><p style="margin-left:0px;"><span style="background-color:rgb(255,255,255);color:rgba(0,0,0,0.9);">Facing multiple competitive pressures, do you think Intel can turn the tide in the AI era?</span></p>

In the AI era, can Intel win a comeback?

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<p>Applied Materials has received multiple upgrades from major brokerages due to a surge in semiconductor capital spending linked to AI. Analysts emphasize the importance of wafer fabrication equipment, with Applied Materials positioned as a key supplier. Increased capital expenditures from chipmakers like TSMC and Intel are expected to boost demand for Applied Materials' tools. Despite the stock being flagged as overvalued, recent momentum shows a 27% return in 30 days. Investors are advised to monitor order intake and backlog in relation to semiconductor capex trends.</p>

- Major brokerages have upgraded NasdaqGS:AMAT, citing increased semiconductor capital spending driven by AI, particularly in wafer fabrication equipment.  
- Chipmakers like TSMC and Intel are elevating capital expenditures, positively impacting demand for Applied Materials' tools, highlighting its significance in the global chip supply chain.  
- Continuous AI-related demand could keep investor attention on Applied Materials, especially regarding its order pipeline and product mix in relation to semiconductor spending trends.

Applied Materials Upgrades Link AI Capex Boom To Stretch Valuation Concerns