Applied Materials (AMAT) Positioned for DRAM and TSMC-Driven WFE Growth, Says Morgan Stanley

Core Insights - Applied Materials, Inc. (NASDAQ:AMAT) is recognized as one of the 15 Dividend Stocks that outperform the S&P 500 [1] - Morgan Stanley has raised its price target for Applied Materials to $273 from $252, citing strong growth expectations driven by DRAM demand and TSMC investments [2] - The company reported nearly $8 billion in cash from operations and $5.7 billion in free cash flow, with a consistent dividend increase over the past eight years [4] Financial Performance - In Q3 2025, Applied Materials noted significant investment in advanced semiconductors and wafer fab equipment, marking its sixth consecutive year of fiscal growth [3] - The company generated $8 billion in cash from operations and $5.7 billion in free cash flow, with capital spending of $2.3 billion primarily for the new EPIC Center [4] - Applied Materials has returned $1.4 billion to shareholders through cash dividends, with a compound annual growth rate of around 15% in dividend per share over the past decade [4] Market Position - The company is well-positioned at key technology inflection points in the fastest-growing market segments, including leading-edge logic, DRAM, and advanced packaging [3] - The wafer fab equipment (WFE) market is projected to grow to $129 billion in 2026 and $145 billion in 2027, reflecting year-over-year growth of 11% and 13% respectively [2]