Jeffrey raises AMAT target price, claims AI drives up demand for DRAM and advanced packaging equipment According to BlockBeats, on June 26th, Jeffrey raised the target price for Applied Materials from $510 to $770 in his June 25th report and maintained a "buy" rating, citing that AI is driving up the complexity of DRAM, HBM, and advanced packaging manufacturing, thereby expanding AMAT's equipment market. AMAT closed at $668 in the previous trading day, with a new target price corresponding to approximately 15% upside potential. Jeffrey also provided a bull market scenario of $900 and a bear market scenario of $500. The report states that DRAM is increasingly adopting advanced logic chip processes, including FinFET, CMOS Bonded Array, more EUV, and complex interconnects. This will improve the deposition, etching, interconnect, and process control steps, enabling AMAT's DRAM to serve the market at a wafer capacity of 100000 wafers per month, rising from approximately $6 billion for 6F ² architecture to $6.5 billion for 4F ², and reaching approximately $7.5 billion in the 3D DRAM stage. HBM is another key driver. Jeffrey stated that HBM requires 3 to 4 times the wafer investment to achieve equivalent bit shipments, so even if DRAM bit growth is moderate, actual device demand will be amplified. AMAT holds approximately 50% of the service-oriented market share in HBM packaging related equipment. Advanced packaging is also accelerating. Jeffrey expects AMAT's advanced packaging business to grow by over 50% this year, with revenue exceeding $2 billion; The business has tripled from 2020 to 2024. Future growth will come from hybrid bonding, 3D/3.5D packaging, panel interposer, and CoPoS. The report specifically mentions the Kinex die to wafer hybrid bonding system and believes that AMAT will benefit from the expansion of AI accelerator packaging size and upgrading of packaging processes. In terms of finance, Jeffrey expects AMAT's fiscal year 2026 EPS to be $14.01 and fiscal year 2027 EPS to be $18.06; Revenue is approximately $36.7 billion and $44.2 billion respectively. The target price of $770 is based on a 2028 annual EPS of $21.25 and a price to earnings ratio of approximately 36 times. Risks include slower capital expenditures by cloud vendors, stagnant wafer fab equipment market, AMAT losing market share in deposition/etching/process control, and poor execution of manufacturing process transformation.