Analyst Recommends Applied Materials (AMAT) as Top AI and Data Center Stock

We recently published 10 Stock News You Can’t Miss As Investors Watch AI Trade Momentum. Applied Materials Inc (NASDAQ:AMAT) is one of the stock news you can’t miss.

Jordan Blashek from Perimeter Acquisition said in a recent program on Schwab Network that data centers take about 4% of the entire energy supply in the US, and this figure is expected to jump to 12% by 2028. He believes we are still in the beginning of the AI and data center buildout. According to Schwab Network, AMAT is among the top picks of the analyst.

“We’re at the very very beginning of this AI revolution and capex is frontloaded. So as you think about the data center build, a lot of that’s going to go in upfront but then you’re going to see the rise of AI across various sectors of the economy over the next two, three decades. And so this early capex spend I think is about right. I think you will likely see some air pockets in the near future as there is some turbulence in the markets, but I think long term, unlike the infrastructure of the dotcom boom, the current AI burn is dramatic, it is using up all of that capex very very quickly and the real bottleneck is not the capex spend, it’s going to be in energy,” Blashek said.

Heartland Opportunistic Value Equity Strategy stated the following regarding Applied Materials, Inc. (NASDAQ:AMAT) in its second quarter 2025 investor letter:

“During the quarter, we initiated a new position in Applied Materials, Inc. (NASDAQ:AMAT), the largest and most diversified supplier of capital equipment, services, and solutions for semiconductor manufacturing. The company is a major supplier of wafer fabrication equipment (WFE), controlling 21% market share, which was built over decades of organic and inorganic growth. It is the world’s dominant player in deposition, a highly precise, mission-critical step in the fabrication process where a thin film imparts electrical characteristics to the wafer’s surface at the atomic level.

We capitalized on the cyclical downturn in the semiconductor industry to purchase AMAT near our downside target. Our confidence in the company was further strengthened by insider buying, especially a $7mm stock purchase by CEO Gary Dickerson in early April.

In our opinion, Applied Materials will enjoy several tailwinds, including increased demand for advanced packaging and complex manufacturing processes fueled by rising chip architecture complexity. That should boost WFE spending, positioning AMAT as a secular beneficiary.

These tailwinds should lead to a re-rating of the stock as a premier analog semiconductor manufacturer along with Texas Instruments and Analog Devices, which command a multiple well above 25x earnings. At that multiple, AMAT shares could trade in the low $300 range based on mid-cycle EPS, up from its current price of around $170 a share.”

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Disclosure: None. This article is originally published at Insider Monkey.