12:25 PM EDT, 05/15/2026 (MT Newswires) -- Applied Materials (AMAT) has "unprecedented"visibility into 2027 and 2028 as customers provide rolling eight-quarter forecasts and margins show structural improvement, BofA Securities said in a note Thursday.

Full-year 2026 systems sales are now expected to grow 30% year over year, up from a prior forecast of 20%, driven by advanced logic chips, DRAM memory and advanced packaging demand, the brokerage said.

The company's margin/free cash flow profile is improving, with semiconductor systems gross margins approaching 55% and operating margins trending toward levels seen at peers, according to the note.

The brokerage also highlighted strong growth prospects for advanced packaging and services businesses, while warning that mature-node exposure and higher operating expense intensity could weigh on growth.

The brokerage raised its 2026 and 2027 earnings per share estimates by 14% and 18%, respectively, and increased its price target to $540 from $465, while reiterating a buy rating.

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