Applied Materials (NASDAQ: AMAT) Outlook: AI-Driven Growth and Financial Targets

• Cantor Fitzgerald maintains an Outperform rating on Applied Materials despite a recent stock dip.
• The company anticipates sustained demand for its chipmaking equipment, fueled by AI infrastructure buildout.
• Applied Materials projects significant market share gains and strong financial performance (gross margin, operating margin, free cash flow return) by 2030.

Applied Materials (NASDAQ: AMAT) makes equipment used to produce computer chips. Cantor Fitzgerald maintains its Outperform rating, with the action listed as hold. The stock trades at $464.17 when the update is posted.

The shares are down $33.36, or 6.71%, at that price. They trade between $452.81 and $485.40 during the day. As highlighted by 24/7 Wall Street, investors take profits in chip-equipment stocks after a strong year driven by artificial intelligence spending. Competitors Lam Research (NASDAQ: LRCX) and KLA (NASDAQ: KLAC) each fall about 4%.

At its October 13 SEMICON West investor presentation, Applied Materials says the buildout of AI infrastructure supports demand for its equipment over several years. It points to tools used in advanced chipmaking, memory production and packaging, which connects separate chip components.

Applied Materials expects spending on wafer fab equipment—the machines used to make chips—to grow faster through 2030 than it does over the past decade. The company aims to gain more than 2 percentage points of that market from 2025 to 2030.

By 2030, Applied Materials targets a non-GAAP gross margin of about 54% and a non-GAAP operating margin of about 40%. Those measures show how much revenue remains after certain costs, with non-GAAP figures excluding some accounting items. Applied Materials also plans to return 80% to 100% of free cash flow, the cash left after capital spending, to shareholders over time.