美银重申应用材料买入、目标价650美元，看好SEMICON West前WFE超增长逻辑，但无新增评级催化

Accessible version

Applied Materials, Inc.
SEMICON West preview: Well positioned
for WFE outperformance
Reiterate Rating: BUY | PO: 650.00 USD | Price: 509.57 USD

Focus will be on how roadmap enables LT WFE outgrowth

09 October 2026 Corrected

AMAT’s annual Investor Breakfast presentation at SEMICON West (Oct 13-16 in San
Francisco) could focus on the long-term growth opportunity inside an unprecedented
time when WFE is growing from $156bn CY26 to ~$360bn CY30 (25% CAGR). We think
the message will be: (1) how materials engineering could comprise 75-100% of
incremental WFE as devices gain complexity; (2) optimization/integration across multiple
process steps required for AI-inflections like gate-all-around, next-gen memory; (3)
power/performance are bottlenecks, but so is time-to-market (given supply constraints)
making initiatives like EPIC more relevant; (4) how AMAT has been investing in these
goals across its broad portfolio which should lead to multi-year outgrowth to WFE. Reit.
Buy on DRAM leadership, share gains in logic and advanced packaging, Street estimates
likely don’t reflect growth potential ahead. Consensus expects +22%/+31% sales/EPS
CAGR CY26-28 but our EPS power analysis suggests +28%/43% as a base case (ex. 7).

Equity

th

Advanced logic, DRAM, advanced packaging key drivers
As more wafers shift to the leading-edge CY27-30E, we expect AMAT to better realize
>50% share of its $14bn per 100K wafers 2nm GAA/BSPDN SAM and $6.5bn per 100K
wafers for 4F2 DRAM ($7.5bn for 3D DRAM), a +30% increase vs. FinFET and 6F2,
respectively. AMAT has the largest advanced packaging franchise (~$1.5bn FY25
growing >70% YoY and doubling LT), and we expect an update on how recent
investments (NEXX, Kinex BESI collaboration) should contribute to structural gains.

Systems growing ~7ppt above WFE CY26, below CY27/29
Against WFE growth of +33%, AMAT Systems are growing +40% YoY, second only to
LRCX. Partly strong exposure to DRAM (~19% share), we believe the gains largely came
from logic, where AMAT is picking up 150bps of share to ~20%, as foundry/logic sales
grow 38% YoY against logic WFE of +28% YoY. As logic/DRAM continues to dominate
spending, we expect outgrowth to continue ahead. However, current consensus has
estimates undergrowing our WFE estimates of 30-40% YoY growth CY27-28, which in
our view is at odds with the structural share gain opportunity shaping up for AMAT.
Estimates (Oct) (US$)
EPS
GAAP EPS
EPS Change (YoY)
Consensus EPS (Bloomberg)
Consensus EPS (Visible Alpha)
DPS
Valuation (Oct)
P/E
GAAP P/E
Dividend Yield
EV / EBITDA*
Free Cash Flow Yield*

2024A
8.66
8.61
7.6%

2025A
9.42
8.66
8.8%

1.84

2026E
12.76
12.95
35.5%
12.99
12.76
2.12

2027E
18.54
17.36
45.3%
18.81
18.75
2.43

2028E
23.50
22.30
26.8%
23.92
23.94
2.74

1.44

58.8x
59.2x
0.3%
49.0x
1.9%

54.1x
58.8x
0.4%
45.3x
1.4%

39.9x
39.3x
0.4%
34.2x
1.6%

27.5x
29.4x
0.5%
23.5x
3.0%

21.7x
22.9x
0.5%
18.7x
3.6%

* For full definitions of iQ method SM measures, see page 9.

BofA Securities does and seeks to do business with issuers covered in its research
reports. As a result, investors should be aware that the firm may have a conflict of
interest that could affect the objectivity of this report. Investors should consider this
report as only a single factor in making their investment decision.
Refer to important disclosures on page 10 to 12. Analyst Certification on page 8. Price
Objective Basis/Risk on page 8.
13026644

Vivek Arya
Research Analyst
BofAS
+1 646 855 1755
vivek.arya@bofa.com
Duksan Jang
Research Analyst
BofAS
duksan.jang@bofa.com
Michael Mani
Research Analyst
BofAS
michael.mani@bofa.com
Liam Pharr
Research Analyst
BofAS
liam.pharr@bofa.com

Stock Data
Price

509.57 USD

Price Objective

650.00 USD

Date Established

13-Aug-2026

Investment Opinion
52-Week Range
Mrkt Val (mn) / Shares Out

C-1-7
203.40 USD - 739.67 USD
404,578 USD / 794.0

(mn)
Free Float
Average Daily Value (mn)
BofA Ticker / Exchange
Bloomberg / Reuters

99.6%
3125.68 USD
AMAT / NAS
AMAT US / AMAT.OQ

ROE (2026E)

41.9%

Net Dbt to Eqty (Oct-2025A)

-9.9%

Glossary on page 6

iQprofile Applied Materials, Inc.
SM

iQmethod SM – Bus Performance*
(US$ Millions)
Return on Capital Employed
Return on Equity
Operating Margin
Free Cash Flow

Company Sector
2024A
29.7%
40.8%
29.1%
7,487

2025A
26.9%
38.6%
30.1%
5,698

2026E
33.2%
41.9%
32.9%
6,275

2027E
33.7%
42.9%
35.4%
12,093

2028E
32.0%
38.2%
36.8%
14,643

Semiconductor Capital Equipment

Company Description
Applied Materials is a supplier of semiconductor and
semiconductor-related fabrication equipment, providing

iQmethod SM – Quality of Earnings*
(US$ Millions)
Cash Realization Ratio
Asset Replacement Ratio
Tax Rate
Net Debt-to-Equity Ratio
Interest Cover

g technology solutions to the global
2024A
1.2x
3.0x
12.0%
-16.9%
32.1x

2025A
1.0x
5.2x
24.5%
-9.9%
31.8x

2026E
0.9x
4.8x
12.5%
-16.2%
41.3x

2027E
1.0x
3.0x
13.7%
-32.5%
20.9x

2028E
1.0x
3.0x
13.5%
-42.6%
26.3x

semiconductor, flat panel display, and other industries.
Applied's results are primarily driven by worldwide demand
for chips and flat panel displays, which, in turn, depends on
end-user demand for electronic products.

Investment Rationale
Income Statement Data (Oct)
(US$ Millions)
Sales
% Change
Gross Profit
% Change
EBITDA
% Change
Net Interest & Other Income
Net Income (Adjusted)
% Change

We rate AMAT Buy. AMAT is among the largest suppliers of
2024A
27,176
2.5%
12,897
4.1%
8,316
1.0%
265
7,210
6.0%

2025A
28,368
4.4%
13,808
7.1%
8,997
8.2%
140
7,607
5.5%

2026E
34,287
20.9%
17,126
24.0%
11,911
32.4%
119
10,187
33.9%

2027E
46,731
36.3%
23,702
38.4%
17,360
45.7%
260
14,656
43.9%

2028E
56,369
20.6%
28,768
21.4%
21,741
25.2%
260
18,328
25.1%

semiconductor capital equipment due to its broad product

2024A
7,177
392
1,117
(633)
624
(1,190)
7,487
-1.4%
(3,580)
(1,192)
593

2025A
6,998
435
1,718
(29)
(1,164)
(2,260)
5,698
-23.9%
(4,634)
(1,384)
289

2026E
10,346
583
(2,023)
25
127
(2,783)
6,275
10.1%
(1,486)
(1,569)
(101)

2027E
13,732
774
(1,110)
0
1,034
(2,337)
12,093
92.7%
(1,760)
(1,910)
0

2028E
17,404
934
(2,118)
0
1,242
(2,818)
14,643
21.1%
(1,760)
(2,120)
0

Stock Data

portfolio, technical capabilities, and strong service and
support. In our view, the combination of AMAT's scale and
balanced portfolio positions it to be a key beneficiary of
growing demand for all chips in a data-driven economy. We
think AMAT will benefit from an upcyle in DRAM WFE and
leading-edge foundry/logic where it can capture share.

Free Cash Flow Data (Oct)
(US$ Millions)
Net Income from Cont Operations (GAAP)
Depreciation & Amortization
Change in Working Capital
Deferred Taxation Charge
Other Adjustments, Net
Capital Expenditure
Free Cash Flow
% Change
Share / Issue Repurchase
Cost of Dividends Paid
Change in Debt
Balance Sheet Data (Oct)
(US$ Millions)
Cash & Equivalents
Trade Receivables
Other Current Assets
Property, Plant & Equipment
Other Non-Current Assets
Total Assets
Short-Term Debt
Other Current Liabilities
Long-Term Debt
Other Non-Current Liabilities
Total Liabilities
Total Equity
Total Equity & Liabilities

2024A
9,471
5,234
6,515
3,339
9,850
34,409
799
7,669
5,460
1,480
15,408
19,001
34,409

* For full definitions of iQ method SM measures, see page 9.

2

Applied Materials, Inc. | 09 October 2026

2025A
8,573
5,185
7,123
4,610
10,808
36,299
100
7,899
6,455
1,430
15,884
20,415
36,299

2026E
11,126
7,522
7,870
6,401
12,821
45,741
1,299
8,696
5,245
2,294
17,534
28,207
45,741

2027E
19,550
8,733
8,579
8,738
12,821
58,420
1,299
9,505
5,245
2,294
18,343
40,077
58,420

2028E
30,313
9,662
9,072
11,556
12,821
73,425
1,299
8,810
5,245
2,294
17,648
55,777
73,425

Average Daily Volume

6,186,439

Quarterly Earnings Estimates
2025

2026

Q1

2.38A

2.38A

Q2

2.39A

2.86A

Q3

2.48A

3.50E

Q4

2.17A

4.02E

Exhibits
Exhibit 1: AMAT is outgrowing WFE in CY26, with System sales growing 40% YoY vs. industry growth of 33% YoY. It is also outgrowing other large semi cap
peers, growing an average of +37% YoY.
Major semicap systems sales CY19-28

Semi Systems Sales ($mn)
Applied Materials
ASML
Lam Research
KLA Corporation
Tokyo Electron

Total sales
Sales YoY%
Applied Materials
ASML
Lam Research
KLA Corporation
Tokyo Electron

Total sales
Share of Top 5 Semi Caps
Applied Materials
ASML
Lam Research
KLA Corporation
Tokyo Electron

Total sales

CY19

CY20

CY21

CY22

CY23

CY24

CY25

CY26

CY27

CY28

9,573
10,044
6,295
3,221
6,934
36,067

12,106
12,023
7,968
3,727
8,248
44,072

17,300
15,865
10,974
5,439
12,360
61,939

19,392
16,135
12,387
7,413
12,655
67,982

19,445
23,804
8,322
6,716
9,853
68,141

20,599
23,365
9,584
7,544
11,576
72,667

20,985
28,232
13,378
8,972
11,639
83,205

29,398
38,038
19,461
11,240
15,452
113,589

39,188
50,718
26,796
15,085
25,239
157,025

45,870
64,479
32,257
18,362
32,447
193,414

-4%
4%
-21%
2%
-18%
-8%

26%
20%
27%
16%
19%
22%

43%
32%
38%
46%
50%
41%

12%
2%
13%
36%
2%
10%

0%
48%
-33%
-9%
-22%
0%

6%
-2%
15%
12%
17%
7%

2%
21%
40%
19%
1%
15%

40%
35%
45%
25%
33%
37%

33%
33%
38%
34%
63%
38.2%

17%
27%
20%
22%
29%
23%

27%
28%
17%
9%
19%
100%

27%
27%
18%
8%
19%
100%

28%
26%
18%
9%
20%
100%

29%
24%
18%
11%
19%
100%

29%
35%
12%
10%
14%
100%

28%
32%
13%
10%
16%
100%

25%
34%
16%
11%
14%
100%

26%
33%
17%
10%
14%
100%

25%
32%
17%
10%
16%
100%

24%
33%
17%
9%
17%
100%

Source: BofA Global Research estimates, Bloomberg, Gartner, company reports, Visible Alpha
BofA GLOBAL RESEARCH

Exhibit 2: Advanced logic and DRAM WFE (along with associated advanced packaging) should be the
biggest drivers of WFE growth through CY28 which AMAT’s portfolio is well suited for
WFE by device type ($ mn)

300,000

Foundry/Logic

DRAM

NAND

150,000

0
CY19

CY20

CY21

CY22

CY23

CY24

CY25

CY26

Source: BofA Global Research estimates, Bloomberg, Gartner, company reports, Visible Alpha
BofA GLOBAL RESEARCH

Applied Materials, Inc. | 09 October 2026

3

Exhibit 3: AMAT’s share of WFE is ticking up to 18.9% in CY26
WFE share among major semicaps

30%

20%

Applied Materials
Lam Research
Tokyo Electron

18.3%

Exhibit 4: We think this share gain is driven by a 150bps surge in
foundry/logic share
Foundry/Logic WFE share among major semicaps

ASML
KLA Corporation

19.8% 19.7% 20.3% 19.9% 19.6%

30%

18.0%

Applied Materials
Lam Research
Tokyo Electron

ASML
KLA Corporation
22.2%

18.9%
20%

17.7%

18.5%

20.3% 20.1%

19.9%

18.5%

20.1%

10%
10%

0%
CY19

CY20

CY21

CY22

CY23

CY24

CY25

CY26

Source: BofA Global Research estimates, Bloomberg, Gartner, company reports, Visible Alpha
BofA GLOBAL RESEARCH

0%
CY19

Materials Engineering WFE

90%
34%

41% 39% 39% 37%

Lithography/Track WFE

33% 31% 28% 31% 34% 33% 30% 27%

38% 35% 36% 36% 36% 36% 37% 37%

60%

67% 69%
30% 66% 59% 61% 61% 63%

72% 69%

66% 67% 70%

73%

62% 65% 64% 64% 64% 64% 63% 63%

0%

Source: BofA Global Research estimates, company reports, Gartner
BofA GLOBAL RESEARCH

4

Applied Materials, Inc. | 09 October 2026

CY21

CY22

CY23

CY24

CY25

CY26

Source: BofA Global Research estimates, Bloomberg, Gartner, company reports, Visible Alpha
BofA GLOBAL RESEARCH

Exhibit 5: We believe incremental WFE should continue to favor materials engineering WFE over
litho/track steps which is a tailwind for AMAT share
Materials Engineering WFE (ex-Process Control and Clean) vs. Litho/Track WFE mix

120%

CY20

Exhibit 6: Many of the new tools Applied Materials has released over the last few years have been
focused on advanced packaging and interconnect applications with an emphasis on integration
Recent product releases by Applied Materials since CY24
Year
2024
2024
2025
2025
2025
2026
2026
2026
2026
2026
2026
2026
2026

Product

Area

What It Does

RuCo liner enables copper scaling
Endura Copper Barrier Seed IMS
Interconnect
at 2nm+ while lowering
+ Volta Ruthenium CVD
resistance up to 25%
Lower capacitance dielectric with
Enhanced Black Diamond Low-K
Interconnect / Packaging
improved mechanical strength
First integrated die-to-wafer
Kinex Hybrid Bonding
Advanced Packaging
hybrid bonding platform
Void-free source/drain epitaxy for
Centura Xtera Epi
Logic / GAA
GAA transistors
Advanced eBeam metrology with
PROVision 10
Process Control
sub-nanometer resolution
Brings logic-class strain
Enhanced Centura Prime Epi
DRAM
engineering into DRAM peripheral
transistors
CMP designed specifically for
Opta Quad CMP
Advanced Packaging
hybrid bonding surfaces
High uniformity Cu plating for
Nokota VMax 2 ECD
Advanced Packaging
TSVs and microbumps
Stress-balanced films for ultraProducer Avila 2 PECVD
HBM
thin HBM dies
eBeam metrology for warped
VeritySEM 7AP
Advanced Packaging Metrology
packaging substrates
Defect review and classification
SEMVision G7AP
Advanced Packaging Inspection
for packaging
Advanced nitride deposition for
Centris Spectral SiN ALD
Logic / Memory
complex 3D structures
Selective molybdenum etch for
Producer Selectra Mo Etch
NAND
next-gen wordline structures

Source: Applied Materials
BofA GLOBAL RESEARCH

Exhibit 7: We see potential CY28 EPS power of $27.60-$32.68 for AMAT, 16-38% above consensus
AMAT EPS Power
Units in $bn
CY28 WFE
Share
Systems Revenue
Services
Other
Total
Gross Profit
Gross Margin
Opex
Opex % of sales
Operating Income
Operating Margin
Interest Income/Expense
Pre-Tax Income
Tax Rate
Net Income
pf-EPS
Share Count
Consensus CY28 EPS
Upside (%)
Forward PE Assumption
Implied CY30E Val'n
CY26-28E Sales CAGR
CY26-28E EPS CAGR

AMAT
18.0%
$49.0
$7.9
$1.7
$56.8
$30.7
54.0%
$7.4
13%
$23.3
41.0%
$0.1
$23.4
11.0%
$20.8
$27.50
756
$23.77
15.7%
20.0x
$550
22.0%
37.5%

$272
20.0%
$54.4
$7.9
$1.7
$62.3
$33.6
54.0%
$8.1
13%
$25.5
41.0%
$0.0
$25.5
11.0%
$22.7
$30.05
756
$23.77
26.4%
20.0x
$601
27.7%
43.7%

22.0%
$59.8
$7.9
$1.7
$67.7
$36.6
54.0%
$8.8
13%
$27.8
41.0%
$0.0
$27.8
11.0%
$24.7
$32.68
756
$23.77
37.5%
20.0x
$654
33.2%
49.9%

Source: BofA Global Research estimates, company reports
BofA GLOBAL RESEARCH

Applied Materials, Inc. | 09 October 2026

5

Exhibit 8: Multiples across the semicap landscape are in-line with long-term medians despite strong ~30% EPS CAGR ahead, including AMAT
AMAT comps table
Mkt
cap
ASML
Camtek
Nova
Onto Innovation
Axcelis
KLA Corporation
Lam Research
Tokyo Electron
Overall Average
Overall Median
Applied Materials
Applied Materials Consensus

(in mn)
$708,278
$7,024
$11,270
$14,363
$4,122
$257,024
$401,194
$183,976

$404,393
$404,393

P/E

EV/Sales

EV/FCF

Sales YoY (%)

EPS YoY (%)

2026E 2027E 2028E 2026E 2027E 2028E 2026E 2027E 2028E 2026E 2027E 2028E 2026E 2027E 2028E
41.5x
41.6x
33.3x
36.2x
32.5x
43.5x
41.1x
37.0x

38.3x
39.1x

29.9x
30.5x
26.0x
24.9x
25.3x
31.5x
30.0x
29.1x
28.4x
29.5x

23.1x
25.2x
21.2x
21.0x
16.2x
26.2x
24.6x
22.2x
22.5x
22.7x

35.0x
36.3x

26.2x
25.8x

21.3x
21.0x

Sales
CAGR

EPS
CAGR

PEG
Ratio

CY26-28

CY26-28

11.0x
10.5x

11.2x
8.8x
7.7x
7.4x
3.9x
12.9x
10.5x
7.5x
8.7x
8.2x

9.2x
7.7x
6.4x
6.5x
3.1x
11.1x
9.1x
6.3x
7.4x
7.1x

57.4x
89.9x
48.0x
56.5x
17.7x
54.3x
62.1x
164.5x
68.8x
56.9x

34.5x
28.2x
26.7x
27.1x
28.2x
34.0x
38.0x
58.9x
34.4x
31.1x

28.2x
41.9x
NA
26.1x
NA
29.6x
30.2x
29.3x
30.9x
29.4x

32%
20%
23%
45%
5%
23%
42%
27%
27%
25%

28%
28%
26%
29%
12%
28%
29%
20%
25%
28%

21%
15%
19%
13%
26%
16%
15%
18%
18%
17%

53%
11%
24%
64%
-16%
28%
59%
45%
33%
36%

39%
37%
28%
45%
28%
38%
37%
27%
35%
37%

30%
21%
23%
19%
56%
20%
22%
31%
28%
22%

25%
21%
22%
21%
19%
22%
22%
19%
21%
22%

34%
29%
25%
31%
42%
29%
29%
29%
31%
29%

0.7x
0.9x
0.8x
0.7x
0.4x
0.9x
0.8x
0.8x
0.7x
0.8x

10.5x
10.9x

8.2x
8.3x

6.9x
7.0x

45.7x
57.7x

33.5x
28.7x

26.8x
25.7x

35%
31%

28%
32%

18%
18%

54%
49%

34%
41%

23%
23%

23%
25%

28%
32%

0.8x
0.7x

14.3x
11.3x
9.7x
9.6x
4.3x
16.5x
13.6x
9.0x

CY28

Source: BofA Global Research estimates, Bloomberg, company reports
BofA GLOBAL RESEARCH

Glossary

AI: Artificial Intelligence
ALD: Atomic Layer Deposition
AMAT: Applied Materials
BESI: BE Semiconductor Industries
bn: Billion
BofA: Bank of America
BSPDN: Backside Power Delivery Network
bps: Basis Points
CAGR: Compound Annual Growth Rate
CMP: Chemical Mechanical Planarization
Cu: Copper
CY: Calendar Year
CVD: Chemical Vapor Deposition
DRAM: Dynamic Random Access Memory
eBeam: Electron Beam
ECD: Electrochemical Deposition
EPIC: Equipment and Process Innovation and
Materials platform/strategy)
EPS: Earnings Per Share
EV/FCF: Enterprise Value to Free Cash Flow
Ex.: Example
FCF: Free Cash Flow
FinFET: Fin Field-Effect Transistor
FY: Fiscal Year
GAA: Gate-All-Around (Transistor Architecture)
HBM: High Bandwidth Memory
IMS: Integrated Materials Solution
KLA: KLA Corporation
LT: Long-Term
LRCX: Lam Research Corporation

6

Applied Materials, Inc. | 09 October 2026

n (Applied

Low-K: Low Dielectric Constant
Mkt Cap: Market Capitalization
mn: Million
Mo: Molybdenum
NAND: Not AND Flash Memory
P/E: Price-to-Earnings Ratio
PECVD: Plasma-Enhanced Chemical Vapor Deposition
PEG Ratio: Price/Earnings-to-Growth Ratio
pf-EPS: Pro Forma Earnings Per Share
ppt: Percentage Points
Ru: Ruthenium
RuCo: Ruthenium-Cobalt
SAM: Served Available Market (or Serviceable Available Market)
SEM: Scanning Electron Microscope
SEMICON: Semiconductor International Conference and Exhibition
SiN: Silicon Nitride
Street: Wall Street Consensus Estimates
TSV: Through-Silicon Via
Val'n: Valuation
Volta: Applied Materials' ruthenium deposition platform
WFE: Wafer Fab Equipment
YoY: Year-over-Year
2nm: 2-Nanometer Process Node
4F2: 4F² DRAM Cell Architecture
6F2: 6F² DRAM Cell Architectur

Applied Materials, Inc. | 09 October 2026

7

Price objective basis & risk
Applied Materials, Inc. (AMAT)
Our PO of $650 is based on 27x our CY28E P/E estimate. Our PO basis is near the
middle of AMAT's historical 10-42x trading range justified given the potential for WFE
outgrowth in 2026/27E and remains at a discount to other large peers given more
balanced growth profile and lower profitability.
Downside risks to our PO are: slower-than-expected AI-driven semiconductor capital
spending, delays to leading-edge logic and memory ramps, lower-than-expected
materials engineering intensity at GAA, BSPDN, next-generation DRAM and advanced
packaging nodes, slower adoption of hybrid bonding technologies, failure to realize
expected market share gains across logic, DRAM and advanced packaging, increased
competitive pressure, execution risk around recent product investments and technology
transitions, and macroeconomic, geopolitical or supply-chain headwinds that reduce WFE
spending

Analyst Certification
I, Vivek Arya, hereby certify that the views expressed in this research report accurately
reflect my personal views about the subject securities and issuers. I also certify that no
part of my compensation was, is, or will be, directly or indirectly, related to the specific
recommendations or view expressed in this research report.
US - Semiconductors and Semiconductor Capital Equipment Coverage Cluster
Investment rating

Company

BofA Ticker

Bloomberg symbol

Analyst

Advanced Energy Industries
Advanced Micro Devices, Inc
Allegro Microsystems
Analog Devices Inc.
Applied Materials, Inc.
Broadcom Inc
Cadence
Camtek
Credo Technology
Diodes Inc.
Intel
IonQ Inc
KLA Corporation
Lam Research Corp.
M/A-Com
Marvell Technology, Inc.
Microchip
Micron Technology, Inc
MKS Instruments
Nova
NVIDIA Corporation
onsemi
Quantinuum
Synopsys
Teradyne
Texas Instruments Inc.

AEIS
AMD
ALGM
ADI
AMAT
AVGO
CDNS
CAMT
CRDO
DIOD
INTC
IONQ
KLAC
LRCX
MTSI
MRVL
MCHP
MU
MKSI
NVMI
NVDA
ON
QNT
SNPS
TER
TXN

AEIS US
AMD US
ALGM US
ADI US
AMAT US
AVGO US
CDNS US
CAMT US
CRDO US
DIOD US
INTC US
IONQ US
KLAC US
LRCX US
MTSI US
MRVL US
MCHP US
MU US
MKSI US
NVMI US
NVDA US
ON US
QNT US
SNPS US
TER US
TXN US

Duksan Jang
Vivek Arya
Vivek Arya
Vivek Arya
Vivek Arya
Vivek Arya
Vivek Arya
Michael Mani
Vivek Arya
Michael Mani
Vivek Arya
Vivek Arya
Vivek Arya
Vivek Arya
Vivek Arya
Vivek Arya
Vivek Arya
Vivek Arya
Michael Mani
Michael Mani
Vivek Arya
Vivek Arya
Vivek Arya
Vivek Arya
Vivek Arya
Vivek Arya

Ambarella
Ambiq Micro, Inc.
Arm Holdings
Astera Labs Inc
Coherent Corp
Lumentum Holdings
NXP Semiconductors NV

AMBA
AMBQ
ARM
ALAB
COHR
LITE
NXPI

AMBA US
AMBQ US
ARM US
ALAB US
COHR US
LITE US
NXPI US

Vivek Arya
Vivek Arya
Vivek Arya
Vivek Arya
Vivek Arya
Vivek Arya
Vivek Arya

BUY

NEUTRAL

8

Applied Materials, Inc. | 09 October 2026

US - Semiconductors and Semiconductor Capital Equipment Coverage Cluster
Investment rating

Company

BofA Ticker

Bloomberg symbol

Analyst

Axcelis Technologies
GlobalFoundries
Lattice Semiconductor
Qualcomm
Skyworks Solutions, Inc.

ACLS
GFS
LSCC
QCOM
SWKS

ACLS US
GFS US
LSCC US
QCOM US
SWKS US

Duksan Jang
Vivek Arya
Duksan Jang
Vivek Arya
Vivek Arya

Wolfspeed Inc

WOLF

WOLF US

Vivek Arya

UNDERPERFORM

RVW

iQmethod SM Measures Definitions
Business Performance
Return On Capital Employed

Numerator
NOPAT = (EBIT + Interest Income) × (1 − Tax Rate) + Goodwill Amortization

Return On Equity
Operating Margin
Earnings Growth
Free Cash Flow

Net Income
Operating Profit
Expected 5 Year CAGR From Latest Actual
Cash Flow From Operations − Total Capex

Denominator
Total Assets − Current Liabilities + ST Debt + Accumulated Goodwill
Amortization
Shareholders’ Equity
Sales
N/A
N/A

Quality of Earnings
Cash Realization Ratio
Asset Replacement Ratio
Tax Rate
Net Debt-To-Equity Ratio
Interest Cover

Numerator
Cash Flow From Operations
Capex
Tax Charge
Net Debt = Total Debt − Cash & Equivalents
EBIT

Denominator
Net Income
Depreciation
Pre-Tax Income
Total Equity
Interest Expense

Valuation Toolkit
Price / Earnings Ratio
Price / Book Value
Dividend Yield
Free Cash Flow Yield
Enterprise Value / Sales

Numerator
Current Share Price
Current Share Price
Annualised Declared Cash Dividend
Cash Flow From Operations − Total Capex
EV = Current Share Price × Current Shares + Minority Equity + Net Debt +
Other LT Liabilities
Enterprise Value

Denominator
Diluted Earnings Per Share (Basis As Specified)
Shareholders’ Equity / Current Basic Shares
Current Share Price
Market Cap = Current Share Price × Current Basic Shares
Sales

EV / EBITDA

Basic EBIT + Depreciation + Amortization

iQ method SMis the set of BofA Global Research standard measures that serve to maintain global consistency under three broad headings: Business Performance, Quality of Earnings, and validations. The key features of

iQmethod are: A consistently structured, detailed, and transparent methodology. Guidelines to maximize the effectiveness of the comparative valuation process, and to identify some common pitfalls.
iQ database ® is our real-time global research database that is sourced directly from our equity analysts’ earnings models and includes forecasted as well as historical data for income statements, balance sheets, and cash
flow statements for companies covered by BofA Global Research.
iQ profile SM, iQ method SM are service marks of Bank of America Corporation. iQ database ® is a registered service mark of Bank of America Corporation.

Applied Materials, Inc. | 09 October 2026

9

Disclosures

Important Disclosures
Applied Materials (AMAT) Price Chart

The Investment Opinion System is contained at the end of the report under the heading "Fundamental Equity Opinion Key". Dark grey shading indicates the security is restricted with the opinion suspended. Medium grey
shading indicates the security is under review with the opinion withdrawn. Light grey shading indicates the security is not covered. Chart is current as of a date no more than one trading day prior to the date of the
report.

Equity Investment Rating Distribution: Technology Group (as of 30 Sep 2026)
Coverage Universe
Count
Percent
Buy
255
62.04%
Hold
82
19.95%
Sell
74
18.00%
Equity Investment Rating Distribution: Global Group (as of 30 Sep 2026)

Inv. Banking Relationships R1
Buy
Hold
Sell

Count
157
46
31

Percent
61.57%
56.10%
41.89%

Coverage Universe
Buy
Hold
Sell

Inv. Banking Relationships R1
Buy
Hold
Sell

Count
1386
563
446

Percent
67.38%
69.85%
59.95%

Count
2057
806
744

Percent
57.03%
22.35%
20.63%

Issuers that were investment banking clients of BofA Securities or one of its affiliates within the past 12 months. For purposes of this Investment Rating Distribution, the coverage universe includes only stocks. A stock
rated Neutral is included as a Hold, and a stock rated Underperform is included as a Sell.

R1

FUNDAMENTAL EQUITY OPINION KEY: Opinions include a Volatility Risk Rating, an Investment Rating and an Income Rating. VOLATILITY RISK RATINGS, indicators
of potential price fluctuation, are: A - Low, B - Medium and C - High. INVESTMENT RATINGS reflect the analyst’s assessment of both a stock’s absolute total return
potential as well as its attractiveness for investment relative to other stocks within its Coverage Cluster (defined below). Our investment ratings are: 1 - Buy stocks
are expected to have a total return of at least 10% and are the most attractive stocks in the coverage cluster; 2 - Neutral stocks are expected to remain flat or
increase in value and are less attractive than Buy rated stocks and 3 - Underperform stocks are the least attractive stocks in a coverage cluster. An investment
rating of 6 (No Rating) indicates that a stock is no longer trading on the basis of fundamentals. Analysts assign investment ratings considering, among other things,
the 0-12 month total return expectation for a stock and the firm’s guidelines for ratings dispersions (shown in the table below). The current price objective for a
stock should be referenced to better understand the total return expectation at any given time. The price objective reflects the analyst’s view of the potential price
appreciation (depreciation).

Investment rating

Total return expectation (within 12-month period of date of initial
rating)

Ratings dispersion guidelines for coverage clusterR2

Buy
≥ 10%
≤ 70%
Neutral
≥ 0%
≤ 30%
Underperform
N/A
≥ 20%
R2
Ratings dispersions may vary from time to time where BofA Global Research believes it better reflects the investment prospects of stocks in a Coverage Cluster.
INCOME RATINGS, indicators of potential cash dividends, are: 7 - same/higher (dividend considered to be secure), 8 - same/lower (dividend not considered to be
secure) and 9 - pays no cash dividend. Coverage Cluster is comprised of stocks covered by a single analyst or two or more analysts sharing a common industry,
sector, region or other classification(s). A stock’s coverage cluster is included in the most recent BofA Global Research report referencing the stock.
Price Charts for the securities referenced in this research report are available on the Price Charts website, or call 1-800-MERRILL to have them mailed.
BofAS or one of its affiliates acts as a market maker for the equity securities recommended in the report: Applied Materials.
The issuer is or was, within the last 12 months, an investment banking client of BofAS and/or one or more of its affiliates: Applied Materials.
BofAS or an affiliate has received compensation from the issuer for non-investment banking services or products within the past 12 months: Applied Materials.
The issuer is or was, within the last 12 months, a non-securities business client of BofAS and/or one or more of its affiliates: Applied Materials.
BofAS or an affiliate has received compensation for investment banking services from this issuer within the past 12 months: Applied Materials.
BofAS together with its affiliates beneficially owns one percent or more of the common stock of this issuer. If this report was issued on or after the 9th day of the month, it reflects the
ownership position on the last day of the previous month. Reports issued before the 9th day of a month reflect the ownership position at the end of the second month preceding the date of
the report: Applied Materials.
BofAS or one of its affiliates is willing to sell to, or buy from, clients the common equity of the issuer on a principal basis: Applied Materials.

10

Applied Materials, Inc. | 09 October 2026

The issuer is or was, within the last 12 months, a securities business client (non-investment banking) of BofAS and/or one or more of its affiliates: Applied Materials.
BofA Global Research personnel (including the analyst(s) responsible for this report) receive compensation based upon, among other factors, the overall profitability of Bank of America
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profitability of the Bank’s sales and trading businesses relating to the class of securities or financial instruments for which such analyst is responsible.

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Applied Materials, Inc. | 09 October 2026

11

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Applied Materials, Inc. | 09 October 2026