Applied Materials upgraded to Overweight from Equal Weight at Morgan Stanley

Morgan Stanley analyst Shane Brett upgraded Applied Materials (AMAT) to Overweight from Equal Weight with a price target of $209, up from $172. The firm revised up its 2026 wafer fab equipment sales forecast from up 5% year-over-year to up 10%, with the revision “almost entirely” in memory, where its base case is now close to its prior bull case, the analyst tells investors. The firm, which revised up calendar year 2026 EPS estimates for Applied, KLA Corp. (KLAC) (KLA) and Lam Research (LRCX) by 5%-9% to reflect the firm’s new wafer fab equipment forecast, notes that its estimates now are Street high for all companies. Given that Applied has what the firm sees as the most leverage to greenfield DRAM in its coverage and it views China, ICAPS, and leading edge logic as derisked, the firm views the risk reward as “skewed to the upside,” the analyst tells investors.