Applied Materials (NASDAQ:AMAT | AMAT Price Prediction) stock is ripping again. Shares are up 11% today to $697.61 in Monday trading, marking a fresh high, after KeyBanc Capital Markets issued a bullish early note ahead of the company’s Q3 FY2026 earnings report.
The pop extends an already historic run. Applied Materials stock is up 55.61% over the past month, a figure that reflects the recent surge including today’s move. Zoom out further and AMAT shares are up 173% year-to-date and 282% over the past year.
With a market cap now north of $556 billion, the question investors are asking is simple. After a parabolic move, is it time to take profits on Applied Materials stock?
KeyBanc Lifts Target, Cites AI Equipment Cycle
KeyBanc maintained an Overweight rating and raised its AMAT stock price target by $200 to $750, implying further upside from the prior close. Wall Street’s consensus estimate expects Applied Materials to earn $3.38 per share on revenue of roughly $9 billion when the company reports Q3.
That backdrop fits the company’s own playbook. At its recent 2026 DRAM and Advanced Packaging Master Class, Applied Materials forecast semiconductor industry revenue of $1 trillion this year. CEO Gary Dickerson stated on the Q2 FY2026 call that “Applied Materials delivered record quarterly performance, and we now expect our semiconductor equipment business to grow more than 30 percent in calendar 2026.”
Other analyst firms are leaning in, too. B. Riley sees a sustained multi-year semiconductor equipment investment cycle, Wells Fargo reinforced a constructive view of the product portfolio, and Cantor Fitzgerald cited the AI infrastructure buildout driving industry revenue toward roughly $3 trillion by 2029 and potentially exceeding $3.5 trillion by 2030. Applied Materials was also added to the Russell Top 50 Index, reframing it as a large-cap growth name and potentially adding index-tracking flows.
The Bear Case: Stretched Valuation and Insider Selling
Here’s where the “sell?” question gets real. KeyBanc itself warned that expectations across Applied Materials’ businesses are “higher than ever,” meaning shares need beats on key metrics, guidance above consensus, and supportive management commentary just to hold the line into Q3.
Furthermore, Applied Materials’ valuation looks stretched against the analyst community. The consensus price target sits at $551.91, well below where AMAT stock now trades, with a ratings split of roughly 4 strong buys, 28 buys, 8 holds, and no sells. Also, Applied Materials’ trailing 12-month P/E ratio of 65.7x may exceed value investors’ comfort level.
Insider activity is another yellow flag. Over the past three months, Applied Materials has logged 35 insider disposals and zero acquisitions, including CEO Gary Dickerson selling 103,788 shares on June 16 at prices between $590.52 and $599.35. The CTO, CFO, division presidents, and multiple directors sold alongside him, which is a factor worth watching.
Take Profits on AMAT Stock?
The bull case rests on a durable multi-year AI semiconductor equipment cycle, rising price targets, and Applied Materials’ leadership in leading-edge logic, DRAM, and advanced packaging. However, the AMAT stock bears will still observe a consensus target sitting below the current price, fresh insider selling into strength, and very high expectations heading into the next earnings report.
Whether to take some profits or hold for the next leg is an individual decision tied to one’s position size and risk tolerance. Investors should consider keeping their position sizes modest given the velocity of the move and the binary risk into Q3. Check for whether AMAT stock can clear and hold above $700, and whether management’s guidance can clear the elevated bar that KeyBanc just flagged.
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