Applied Materials expects upside heading into July-quarter results as AI infrastructure demand remains robust.

Morningstar has refreshed its model assumptions for Applied Materials ahead of the firm's July-quarter earnings report, following recent June-quarter results from peers Lam Research and KLA that provide context for broader chip equipment demand.

Applied Materials carries a Morningstar Economic Moat rating of Wide and an Uncertainty rating of High. The firm's fair value estimate has been raised to $520 per share from $470, reflecting incrementally higher growth expectations through 2030.

Morningstar expects Applied to report strong results at the high end of guidance for July, with upside potential for October-quarter guidance relative to FactSet consensus. The outlook is supported by robust medium-term wafer fabrication equipment (WFE) demand, which is being incrementally strengthened by steep AI chip supply constraints. Following upside guidance from both KLA and Lam Research, Morningstar anticipates similar upside from Applied.

At the revised $520 fair value estimate, shares appear fairly valued.