Applied Materials Inc. (AMAT): Investor meeting highlights stronger WFE market opportunities plus higher long-term margin targets

We attended Applied's Investor Breakfast at SEMICON West and EPIC Center unveiling on Oct. 12-13, and came away incrementally positive on Applied's path to substantially higher long-term earnings power. We believe the stock's reaction (down 7% amid a sector-wide selloff) may have reflected some level of disappointment given the lack of a specific medium-term WFE forecast and earnings target (prior to 2030). However, we believe the stock is likely to recover as we believe the upcoming earnings season will validate our view that Applied's earnings power is likely to be significantly higher by 2028, given outsized WFE market growth and its outsized exposure to deposition and etch. On the long-term WFE outlook, Applied sees Agentic AI and Physical AI accelerating WFE growth through CY30, with roughly 75% of WFE growth expected to come from leading-edge logic, DRAM and advanced packaging, areas where Applied holds leadership positions;