CEO Points to Strong Multi-Year Demand for Semiconductor Equipment
Applied Materials (NASDAQ:AMAT) shares climbed 6% in pre-market trading on Thursday after Chief Executive Gary Dickerson said semiconductor manufacturers are providing equipment demand forecasts that extend several years into the future, with some visibility reaching as far as 2030.
Speaking to Nikkei Asia, Dickerson said customers are increasingly sharing long-term capacity plans, giving equipment suppliers greater confidence to expand production without the uncertainty that has traditionally characterized the semiconductor industry.
“Chipmakers are sharing their equipment demand outlooks for two years or more to ensure their capacity expansions proceed smoothly,” Dickerson said.
As the world’s largest supplier of semiconductor manufacturing equipment, Applied Materials is viewed as a key beneficiary of sustained investment in chip production.
AI Investment Continues to Support Industry Outlook
Dickerson’s comments arrive after a volatile period for semiconductor equipment stocks.
Earlier this month, concerns over NAND oversupply and the possibility of delayed capital spending triggered sharp declines across the sector, with shares of KLA, Lam Research and Teradyne all posting double-digit losses during a single trading session.
The CEO’s outlook suggests the current investment cycle is being driven by long-term artificial intelligence infrastructure spending rather than short-term demand, supporting expectations for a more durable expansion in semiconductor manufacturing.
Industry forecasts have also become more optimistic. Susquehanna recently increased its wafer fabrication equipment market forecast to $250 billion by 2028, citing continued AI investment and tighter memory market conditions. The firm also raised price targets on several semiconductor equipment companies, including Advanced Energy Industries (NASDAQ:AEIS), Lam Research (NASDAQ:LRCX) and KLA Corporation (NASDAQ:KLAC).
Meanwhile, SemiAnalysis estimates cumulative global AI infrastructure investment could reach $11.1 trillion between 2024 and 2029, potentially supporting equipment demand for years to come.
Analysts Raise Price Targets
Investor sentiment also received a boost from fresh analyst upgrades released on Thursday.
TD Cowen increased its price target on Applied Materials to $700, while Mizuho lifted its target to $650.
The company has also continued to deliver strong financial performance. In its fiscal second quarter of 2026, reported on 14 May, Applied Materials posted earnings per share of $2.86, comfortably ahead of the consensus estimate of $2.68. Revenue reached $7.91 billion, exceeding analysts’ expectations of $7.68 billion.
Attention Turns to August Earnings
Analysts remain increasingly optimistic ahead of the company’s fiscal third-quarter results, scheduled for 13 August.
According to Investing.com data, analysts have issued 25 upward revisions to earnings estimates over the past 90 days, with no downward revisions during the same period. Consensus forecasts now call for earnings per share of $3.39 on revenue of $8.94 billion.
Investors will closely watch the upcoming earnings call for additional details on customer demand, long-term capacity expansion plans and the potential impact of export controls on Asian markets.
Despite its recent gains, Applied Materials shares remain about 18% below their 52-week high of $739.67, leaving further upside if confidence in the long-term semiconductor investment cycle continues to strengthen.