AMAT Expands in Logic, DRAM, and Next-Gen Packaging: What’s on the Horizon?

Applied Materials: Leading the Way in Semiconductor Equipment Growth

Applied Materials (AMAT) anticipates that its advanced foundry, logic, DRAM, and high-bandwidth memory (HBM) divisions will be the primary drivers of its wafer fabrication equipment business by 2026. The company’s performance in the logic segment is fueled by the industry’s transition from FinFET to Gate-All-Around (GAA) transistors and the adoption of backside power delivery solutions.

AMAT is at the forefront of developing GAA transistors at the 2nm scale and below, as well as innovations in HBM stacking, hybrid bonding, and 3D device metrology—technologies essential for producing the next generation of semiconductor chips. Recent product introductions such as Xtera epi, Kinex hybrid bonding, and PROVision 10 eBeam are expected to contribute significantly to the company’s momentum through 2026 and beyond.

The company’s DRAM portfolio is seeing increased demand as customers invest in 6F² nodes, driven by the growing need for high-bandwidth memory to support artificial intelligence workloads. During its first-quarter 2026 earnings report, AMAT highlighted record-setting growth in both logic and DRAM, propelled by major shifts in semiconductor technology.

As HBM chips become more complex and larger in size, they require three to four times more wafer starts per bit compared to traditional DRAM, making them highly equipment-intensive—a positive trend for AMAT as the HBM market expands. The company has set a goal to reach $3 billion in revenue in the coming years.

Looking ahead, AMAT expects future HBM generations to utilize hybrid bonding, an area where the company is a recognized innovator. Its advancements in advanced packaging, particularly 3D chiplet stacking, provide additional growth opportunities as AI chips become increasingly diverse. New product launches and progress in cold field emission e-beam technology further reinforce AMAT’s competitive edge.

Competitive Landscape: How Rivals Stack Up

Lam Research (LRCX) has achieved several significant wins in the DRAM space, securing key etch system placements at a major DRAM manufacturer with its Akara etch system, which supports 3D DRAM architectures. These achievements are supported by customer investments in DDR5, LPDDR5, and high-bandwidth memory. Additionally, Lam Research’s Aether dry-resist technology was recently chosen as the production standard for a leading DRAM client, strengthening its position in this fast-growing market.

ASML Holding (ASML) is also experiencing robust demand from DRAM and logic customers, who are ramping up production at advanced nodes using ASML’s NXE:3800E EUV systems. The company notes that multiple DRAM manufacturers are adopting EUV lithography, which helps reduce production cycles and costs.

AMAT’s Stock Performance, Valuation, and Analyst Outlook

Over the past year, shares of Applied Materials have surged by 134.4%, significantly outpacing the 53.9% growth seen in the broader electronics and semiconductor industry.

AMAT 12-Month Performance Chart

Image Source: Zacks Investment Research

From a valuation perspective, AMAT is currently trading at a forward price-to-sales ratio of 9.55, which is above the industry average of 8.46.

AMAT Forward 12-Month (P/S) Valuation Chart

Image Source: Zacks Investment Research

The consensus estimate from Zacks for AMAT’s fiscal 2026 earnings suggests a year-over-year increase of 16.5%. Notably, this estimate has been revised upward in the past week.

Image Source: Zacks Investment Research

Currently, Applied Materials holds a Zacks Rank #1 (Strong Buy).