Semiconductor Sector Rallies on Morgan Stanley Upgrades
Applied Materials and Lam Research jump after the investment bank cites a strengthening outlook for the memory chip market.
The semiconductor sector is showing significant strength, buoyed by a round of influential analyst upgrades from Morgan Stanley. The investment bank upgraded its ratings for chip-equipment makers Applied Materials (AMAT) and Lam Research (LRCX), signaling renewed confidence in the industry's growth trajectory, particularly within the memory market.
, also raising its price target on the stock to $209 from $172. The firm's analysts pointed to the company's significant exposure to the DRAM sector and a valuation they see as discounted relative to its peers. This optimistic view is supported by a revised forecast for the 2026 Wafer Fab Equipment (WFE) market, which Morgan Stanley now projects will reach $128 billion.
Lam Research also received a favorable revision, with its rating . The move reflects a more positive stance on the memory end markets, a significant shift from concerns over slowing growth that had previously influenced the bank's rating. In line with the upgrade, the price target for Lam Research was also increased.
The upgrades reflect a broader theme of recovery and growth in the semiconductor space, as . Following the news, both Applied Materials and Lam Research saw their shares trade significantly higher, leading a broader rally among semiconductor and tech stocks.