12:53 PM EDT, 05/12/2026 (MT Newswires) -- Applied Materials ( AMAT ) is expected to post fiscal second-quarter results slightly above Wall Street's estimates and provide an upbeat third-quarter outlook amid robust dynamic random-access memory and high-bandwidth memory spending trends, RBC Capital Markets said in a note e-mailed Tuesday.

The brokerage projects the semiconductor equipment maker's second-quarter adjusted earnings at $2.64 a share on revenue of $7.65 billion, saying it expects a "slight" beat. Analysts polled by FactSet are looking for non-GAAP EPS of $2.68 and sales of $7.68 billion.

"DRAM spending trends remain strong on the back of extreme supply tightness and secular HBM demand," RBC analyst Srini Pajjuri said in a note to clients. "We expect the trend to continue through the year as clean room space availability improves and from new greenfield projects in 2027."

RBC expects Applied Materials ( AMAT ) to issue third-quarter guidance 5% to 10% ahead of consensus estimates of $2.89 for adjusted EPS and $8.1 billion in revenue. The brokerage said this would be in line with peers Lam Research ( LRCX ) and Tokyo Electron and better than those of ASML ( ASML ) and KLA (KLAC).

"(Applied Materials' ( AMAT )) management typically doesn't offer explicit (wafer fabrication equipment, or WFE) projections, but previously guided for 20% growth in its systems business in (2026), which we believe is tracking ahead," Pajjuri said.

RBC raised its price target on the Applied Materials ( AMAT ) stock to $500 from $430 while reiterating its outperform rating.

The company's shares were down 5.8% in Tuesday afternoon trade. The stock has jumped 63% so far this year.

Transition to gate all around -- a next-generation transistor architecture for smaller chips -- has been a "key driver" from the company, while Taiwan Semiconductor Manufacturing's ( TSM ) adoption of back-side power is projected to be a tailwind in the second half of this year, RBC said.

"Looking ahead, we expect WFE to grow at a double-digit pace for the next (two to three) years driven by (generative artificial intelligence), extreme tightness in DRAM, and growing competition in advanced foundry," Pajjuri said.

Applied Materials ( AMAT ) is scheduled to report its latest results Thursday.

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