Applied Materials gains $50 billion in market capitalization as AI memory chip demand (HBM/LPDRAM) significantly exceeds analyst forecasts.

Applied Materials shares surged Thursday, jumping $63.10 to $652.07—a 10.7% gain that added approximately $50.4 billion to the company's market capitalization. The move was the most pronounced among semiconductor equipment makers: ASML Holding U.S. shares gained $29.6 billion, Lam Research rose $23.2 billion, and KLA gained $2.4 billion in value. The Philadelphia semiconductor index climbed 2.5%, tracking toward its best quarter ever, while the broader Nasdaq Composite slipped 0.31% as Big Tech weakness offset semiconductor strength.

The rally was partially fueled by Micron Technology's guidance beat, which jumped $185.03 to $1,233.54, and Qualcomm's strong data-center outlook, up $14.58 to $211.99. The market had shifted focus toward memory-capex plays rather than generic AI names. Qualcomm's data-center business is expected to reach $15 billion in revenue by 2029.

Applied Materials' momentum accelerated following its June 25 DRAM and Advanced Packaging Master Class, where the company unveiled new systems for both segments. The updated Centura Prime Epi tool is 20% smaller than the previous version, while new process-control tools target HBM and chiplet packaging applications. Semiconductor Products Group president Dr. Prabu Raja noted that DRAM is increasingly adopting materials steps typical of logic chips. "The distinction between logic and memory process technology is converging," Raja said.

Keith Wells, who leads the Imaging and Process Control Group, highlighted advanced packaging's growing demands. "Packaging fabs need eBeam-grade precision," Wells said, pointing out that optical tools can no longer handle the requirements. The company forecast DRAM wafer-fab equipment spending will more than double NAND spending, with its DRAM process-equipment share up roughly ten points since 2013. HBM is driving advanced packaging growth, with over 50% expansion expected this year.

The stock trades at 39.5 times next fiscal year's estimated EPS of $16.50, sitting 18.7% above the average Street target of $549.34 from 39 analysts. The high target stands at $720 and the median at $530. Bank of America raised its price target to $720 from $540 on June 23, maintaining its Buy rating and raising its 2030 semiconductor addressable-market forecast to $2.7 trillion from $2.3 trillion, with memory and data centers accounting for most of that growth. At current levels, the stock sits about 10.4% below BofA's target.

Applied Materials' May earnings set the baseline: record Q2 revenue of $7.91 billion and non-GAAP EPS of $2.86. For Q3, the company guided revenue to $8.95 billion (±$500 million) and non-GAAP EPS to $3.36 (±$0.20). CEO Gary Dickerson said the semiconductor equipment segment should "grow more than 30 percent in calendar 2026."

Market risks remain present. Wealth Alliance CEO Robert Conzo cautioned that "trees don't grow to the sky" after the extended rally in high-growth names. Michele Morganti, senior equity strategist at Generali Investments, noted that "there is still a risk" the Federal Reserve could raise rates this year, adding a note of caution to the market's exuberance.