Applied Materials Fell 5% Today. Here’s Where AMAT Stock Could Go in 2026

Applied Materials (AMAT) stock dropped 5% today despite a record fiscal Q3 performance, as investors sought greater outperformance compared to rivals in the AI semiconductor equipment sector. The company reported a 25% year-over-year revenue increase and a record EPS, with strong growth in DRAM and advanced packaging, predicting over 70% growth in packaging revenue for calendar 2026. A TIKR valuation model suggests AMAT is modestly undervalued with a target price of around $640, implying 19% upside, contingent on sustained DRAM investment, rapid advanced-packaging growth, market-share gains, and operating-margin expansion.