Shares of Applied Materials (AMAT) surged 6.7% to $606.53 during Wednesday's trading session, reaching an intraday high of $623.16, following a significant price target upgrade from Citigroup. The rally underscores growing investor confidence in the semiconductor equipment maker's prospects amid surging demand driven by artificial intelligence.
Citigroup analyst Atif Malik raised his price target for Applied Materials to $710 from $550, maintaining a Buy rating. The upgrade reflects expectations of a structural increase in capital spending by cloud providers expanding their AI computing capacity. Malik also lifted targets for Lam Research and KLA, signaling a broader bullish outlook for the chip-equipment sector. “The rise of agentic AI is driving a structural increase in NAND demand as memory requirements surge and DRAM supply tightens,” Malik noted.
The iShares Semiconductor ETF (SOXX) rose 3.3% on the day, with key equipment suppliers joining the rally. Lam Research gained 4.2%, KLA advanced 1.5%, and ASML climbed 6.2%. The move highlights a broader market bet that wafer fab equipment spending will continue to climb as hyperscalers ramp up AI infrastructure.
Applied Materials also contributed its own positive headlines. The company unveiled SENZ, a visual system for AI-powered smart glasses that integrates waveguide optics, a light engine, sensors, vision correction, and electronic dimming on a single platform. “We built this to help customers get to market faster,” said Paul Meissner, vice president and general manager of Applied’s Photonics Platforms Business.
In addition, Applied Materials announced a long-term joint development agreement with EssilorLuxottica to advance augmented reality optics platforms. Augmented reality allows users to see digital images overlaid onto the real world. “Scaling next-generation smart glasses will require deep collaboration across the technology ecosystem,” CEO Gary Dickerson stated. EssilorLuxottica already leads the AI-glasses market through its partnership with Meta, selling Ray-Ban and Oakley smart glasses.
On the product front, Applied Materials rolled out new deposition and selective etch systems for advanced 3D chip structures earlier this week. Deposition builds thin material layers on wafers, while etching removes material with precision. “The biggest opportunities are increasingly found in materials engineering,” said Prabu Raja, head of Applied’s Semiconductor Products Group.
The company’s financial performance remains robust. Applied Materials posted record fiscal second-quarter revenue of $7.91 billion last month, an 11% year-over-year increase. The company guided fiscal third-quarter sales to approximately $8.95 billion, plus or minus $500 million. CFO Brice Hill described AI growth as “now in full force.”
Despite the positive momentum, risks remain. Applied Materials’ filings cite export controls, tariffs, license delays, demand fluctuations, and technology shift timing as potential headwinds. For the smart-glasses segment, consumer adoption remains uncertain—advanced optics alone may not drive widespread purchases.
Wednesday’s trading session is part of a shortened week due to the Juneteenth holiday, with U.S. equity markets closed on Friday, June 19. Lower volumes could persist until investors receive the next round of data on AI chip-tool demand trends.
