Will Applied Materials Stock Reach $260? One Wall Street analyst agrees.

Businesses involved in AI have been one of the most spectacular stock market successes of 2024 thus far. The stock price of chipmaking equipment supplier Applied Materials (NASDAQ: AMAT) has increased by about 30% year-to-date, which is more than three times the pace of growth of the S&P 500 index. This company is right in the middle of it all.

The spike at Applied Materials is far from over, according to one analyst who follows the firm. To emphasize his point, he has even raised his price target and improved his rating.  

Modernization implemented for Applied Materials Cantor Fitzgerald's C.J. Muse, a Wall Street aficionado, recently upgraded his rating for Applied Materials from neutral to overweight, meaning buy.   

In addition, he drastically revised his price target, going from $220 to $260 per share, for the IT hardware company in the next twelve months or so. Muse has expanded his list of recommended products to include Applied Materials.  

Quite a bit of assurance appears to be underlying this decision. Considering the present share price of the corporation, that new objective is about 24% higher.  

To what end did hope suddenly burst? Capital expenditure lines of leading contract chip manufacturer Taiwan Semiconductor Manufacturing and chip lithography systems specialist ASML are expected to show "positive spending reads" according to Muse. With these positive developments, the analyst sees "a clear path to share gains" and strong profitability for Applied Materials.  

Capitalizing on the AI boom It is exceedingly improbable that the AI train will slow down. Many in the tech industry now assume that companies will create or at least make limited use of their own artificial intelligence applications  

Since AI demands a lot of processing power, Applied Materials is riding the wave of demand that is steadily increasing. In light of this, I find Muse's new, extremely optimistic outlook on the company to be fairly reasonable.  

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