• In late June 2026, Applied Materials was removed from several Russell value-oriented indexes while unveiling new systems for DRAM, advanced packaging, and eBeam inspection aimed at next-generation AI chips and high-bandwidth memory.
• Within days, the company was added to the Russell Top 50 Index, underscoring how investors are reassessing it less as a traditional value name and more as a core AI infrastructure supplier.
• With sector-wide valuation concerns resurfacing after Samsung’s record profit, we’ll examine how this AI-centric repositioning influences Applied Materials’ investment narrative.

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Applied Materials Investment Narrative Recap

To own Applied Materials today you need to believe that AI driven demand for advanced packaging, DRAM and HBM keeps supporting elevated wafer fab equipment spending, and that the company’s broad tool portfolio allows it to stay central to that buildout. The move out of Russell value benchmarks and into the Russell Top 50 does not materially change that core catalyst, but the recent chip sector selloff has sharpened the near term risk around stretched AI valuations and customer capex swings.

The late June launch of new DRAM epitaxy, advanced packaging and eBeam inspection systems is the clearest link between the index reshuffle and Applied’s AI narrative. These tools directly target HBM, chip stacking and tighter process control in advanced packaging, which consensus already views as a key growth engine. How quickly customers adopt these systems, especially in a more cautious memory spending backdrop, will be important for how the story around AI infrastructure leadership evolves.

Yet behind the AI enthusiasm, some analysts warn that export controls and slower DRAM and ICAPS spending could still meaningfully limit the growth that investors should be aware of...

Applied Materials' narrative projects $50.6 billion revenue and $16.6 billion earnings by 2029. This requires 20.4% yearly revenue growth and roughly a $8.1 billion earnings increase from $8.5 billion today.

Uncover how Applied Materials' forecasts yield a $578.91 fair value, in line with its current price.

Exploring Other Perspectives

Some of the most cautious analysts frame this same news very differently, arguing that even before it, they only expected about US$44.2 billion of revenue and US$12.4 billion of earnings by 2029 and see trade and DRAM headwinds as reasons why the current AI excitement could fade faster than many shareholders expect.

Explore 9 other fair value estimates on Applied Materials - why the stock might be worth as much as $578.91!

Form Your Own Verdict

Don't just follow the ticker - dig into the data and build a conviction that's truly your own.

• A great starting point for your Applied Materials research is our analysis highlighting 4 key rewards and 1 important warning sign that could impact your investment decision.
• Our free Applied Materials research report provides a comprehensive fundamental analysis summarized in a single visual - the Snowflake - making it easy to evaluate Applied Materials' overall financial health at a glance.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.