That assumption is being tested in 2026, and Applied Materials<\/strong> (AMAT) has become the clearest test case.<\/p>\n AMAT stock has climbed sharply<\/strong>. Wall Street keeps raising targets<\/strong>, and Goldman Sachs just told clients the stock can still climb higher<\/strong>.<\/p>\n Goldman Sachs kept its buy<\/strong> rating on Applied Materials and lifted its 12-month price target<\/strong> to $645<\/strong>from $520<\/strong>, MarketScreener reports.<\/p>\n Goldman applies about 32 times<\/strong> a normalized earnings figure of roughly $20 per share<\/strong>, Odaily noted. That means the bank is paying up for durability<\/strong> rather than for one strong quarter.<\/p>\n More AI Stocks:<\/strong><\/p>\n The reason is DRAM<\/strong>. DRAM sits inside servers, and in its high-bandwidth form<\/strong>, it sits next to every serious AI accelerator. Applied Materials sells the tools that build it.<\/p>\n Goldman expects the company to grow faster than its peers<\/strong> in 2026. Order visibility now stretches into 2028<\/strong>, and pricing gains<\/strong> could add to that.<\/p>\n Applied Materials is not a chip designer. It makes the machines that deposit, etch, and package the layers inside a chip.\u00a0<\/p>\n That means AMAT earns money when fabrication plants expand<\/strong>, rather than when a specific chip sells well.<\/p>\n That distinction matters for investors, because it turns AMAT into a bet on capital spending<\/strong> across the whole industry, instead of a bet on one customer.<\/p>\n Related: Goldman Sachs sees AMD entering earnings with 1 powerful advantage<\/strong><\/p>\n Applied Materials posted record fiscal second-quarter revenue of $7.91 billion<\/strong>, up about 20%<\/strong> from a year earlier, with earnings of $2.86 a share<\/strong> against a $2.68 estimate<\/strong>.<\/p>\n Goldman now predicts non-GAAP earnings<\/strong> of $14.15 a share<\/strong> for 2026<\/strong>, about 6% above<\/strong> the consensus figure tracked by StockAnalysis.<\/p>\n Numbers only matter here because they explain why Goldman had to move at all.<\/p>\n According to Yahoo Finance, Applied Materials opened near $627<\/strong> on Thursday, July 9, up about 6.8%<\/strong> on the session.\u00a0<\/p>\n The stock is also up roughly 22<\/strong>% over the past month, with a market value near $470 billion<\/strong>.<\/p>\n So far in 2026, the shares are up about 127%<\/strong>. The S&P 500<\/strong> has gained roughly 10%<\/strong> over the same stretch.<\/p>\n Applied has already delivered the kind of return that usually arrives only after a target hike, and the run has drawn a steady stream of target increases.<\/p>\n The stock jumped on July 9 after CEO Gary Dickerson told Nikkei Asia that chipmakers are now handing over equipment demand forecasts<\/strong> covering two years or more<\/strong>.\u00a0<\/p>\n He also noted some plans reaching as far as 2030<\/strong>.<\/p>\n Long-range forecasts from customers give a supplier confidence to add capacity<\/strong> before the orders formally arrive.<\/p>\n Wall Street heard the same thing Goldman did. TD Cowen lifted its target to $700 from $525<\/strong> on the same day, and Mizuho moved to $650<\/strong>, Nikkei Asia reported.<\/p>\n Sundry Photography / Getty Images<\/p>\n<\/figcaption><\/figure>\n Goldman is confident about the fundamentals and cautious on the entry point, and the bank says so plainly in its second-quarter semiconductor preview<\/strong>, Odaily reported.<\/p>\n Analysts expect most chip sub-sectors to beat estimates<\/strong> this quarter, but the Philadelphia Semiconductor Index<\/strong> has already gained about 88%<\/strong> against roughly 14% for the S&P 500<\/strong>.<\/p>\n When a sector runs that far ahead of the index, good results stop being enough. The bar moves with the price.<\/p>\n Applied Materials reports its fiscal third-quarter results on Aug. 13<\/strong>, with consensus at $3.39 a share<\/strong> on revenue of $8.94 billion<\/strong>, Blockonomi reported.<\/p>\n Goldman names two specific dangers, and neither is priced into a 127% gain this year.<\/p>\n The first is regulatory. New export restrictions<\/strong> on advanced tools would hurt a company that sells most of its equipment to China, Taiwan, and Korea.<\/p>\n The second is competitive. Domestic Chinese equipment suppliers<\/strong> keep taking a share, and every point they win comes out of Applied’s addressable market.\u00a0<\/p>\n The company flags both risks in its SEC filings.<\/p>\n Goldman’s $645 target sits below where several rivals now stand, and it sits close to today’s price. That says something useful.<\/p>\n The average target across 29 analysts is about $617.21, which means the stock has already outrun the consensus view of fair value.<\/p>\n For long-term holders, the DRAM and packaging story looks structural<\/strong> rather than cyclical, and it echoes the memory demand shift.<\/p>\n For new investors, the August 13 earnings report<\/strong> is what to watch, since it will show whether the multi-year forecasts<\/strong> Dickerson described are turning into booked orders<\/strong>.<\/p>\n Buying a stock after it has doubled is not automatically a mistake. However, it removes the margin for error that made the trade attractive in the first place.<\/p>\n Related: Top analysts set jaw-dropping Micron stock target after surge<\/strong><\/p>\n #Goldman #Sachs #doubles #Applied #Materials #stock #target<\/p>\n","protected":false},"excerpt":{"rendered":" Semiconductor equipment makers have spent most of this decade at the mercy of a single question. How long will chipmakers keep spending? For years, nobody knew the answer. Fabrication plants… <\/p>\n","protected":false},"author":1,"featured_media":11686,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[246],"tags":[4063,2390,1360,5845,1361,91,1196],"class_list":["post-11685","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-popular","tag-applied","tag-doubles","tag-goldman","tag-materials","tag-sachs","tag-stock","tag-target"],"_links":{"self":[{"href":"https:\/\/www.fintechpulse8.com\/index.php?rest_route=\/wp\/v2\/posts\/11685","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.fintechpulse8.com\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.fintechpulse8.com\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.fintechpulse8.com\/index.php?rest_route=\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/www.fintechpulse8.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=11685"}],"version-history":[{"count":0,"href":"https:\/\/www.fintechpulse8.com\/index.php?rest_route=\/wp\/v2\/posts\/11685\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.fintechpulse8.com\/index.php?rest_route=\/wp\/v2\/media\/11686"}],"wp:attachment":[{"href":"https:\/\/www.fintechpulse8.com\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=11685"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.fintechpulse8.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=11685"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.fintechpulse8.com\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=11685"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}Why Goldman Sachs raised its Applied Materials price target to $645<\/h2>\n
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What Applied Materials does, and why DRAM demand changes its earnings<\/h2>\n
Where the growth is coming from<\/h3>\n
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How Applied Materials stock has traded against the market this year<\/h2>\n
Applied Materials versus the broader market in 2026<\/h3>\n
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What the Applied Materials CEO said about chip demand through 2030<\/h2>\n
![](\"https:\/\/www.thestreet.com\/.image\/NDA6MDAwMDAwMDAzMTA4MzI0\/appliedmaterials_pl_090726.jpg?profile=rss\")
The semiconductor setup that makes this call harder than it looks<\/h2>\n
Risks Applied Materials investors should weigh before buying the rally<\/h2>\n
What would have to go right for the $645 target to hold<\/h3>\n
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What this means for Applied Materials investors deciding what to do next<\/h2>\n