Will Applied Materials' stock price rise to $260? One Wall Street analyst thinks so!

One of the stock market's big success stories so far in 2024 involves companies related to artificial intelligence (AI). Chip manufacturing equipment suppliersApplication Materialsfirms(Applied) Materials ) (NASDAQ: AMAT)is one of them, and the company's stock price has risen nearly 30% so far this year, which isS&P 500The index has more than tripled in size.

One analyst who follows the company believes that Applied Materials' rally is far from over. To emphasize this point, he even upgraded his recommendation and raised his price target significantly.

Promotion for Applied Materials

The Wall Street favorite is Cantor Fitzgerald's C.J. Muse, who recently raised his recommendation on Applied Materials to Hold (read: Buy) from Neutral. He's also revised his price target quite considerably; he now thinks the tech hardware stock could go from $220 to $260 in the next 12 months or so. What's more, Muse now adds Applied Materials to his list of top picks.

There seems to be a lot of confidence behind this move. After all, the new target price is more than 24% higher than the company's current share price.

Why so optimistic? Moose expects that the top name-approved chip makersTaiwan Semiconductor Manufacturing Co.Company and Chip Lithography System SpecialistASML The company's capital expenditure program will lead to a "positive spending interpretation". This analyst believes that with such favorable factors, Applied Materials has a "clear path to share growth" and strong profitability.

Profiting from the Wave of Artificial Intelligence

The AI train is most likely slowing down. In many corners of the tech industry, it is now expected that companies will either develop their own AI applications or use them to some extent. AI requires a lot of processing power, so applied materials companies are swimming in a sea of growing demand.

Given the circumstances, I think Muse's new take on this stock is very realistic.

Should you invest $1,000 in Applied Materials now?

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Eric Volkman does not hold any of the above stocks.The Motley Fool holds recommended stocks in ASML, Applied Materials, and Taiwan Semiconductor Manufacturing.The Motley Fool has a disclosure policy. The Motley Fool has a disclosure policy.

Will Applied Materials shares rise to $260? One Wall Street analyst thinks so.