Partners get the bench early, Applied shareholders get the asterisk
Besi joined Kioxia at Applied's $5 billion EPIC bench on a paid release with no order in it, and AMAT still closed the week's partner news up 3.5 percent. What prices the stock is a $10.25 billion fourth-quarter guide and a Morgan Stanley multiple cut to 22 times.
Vincent Jiang · 3 min read
A paid release and a 3.5 percent day
At 9 a.m. on 1 October, Besi joined Applied Materials' EPIC Center in Silicon Valley as an "Innovation Partner," widening a hybrid-bonding collaboration that started in Singapore in 2020 into thermo-compression bonding, die-on-panel integration and co-packaged optics 1. The announcement ran as a paid press release, and it named no order, no contract value and no change to guidance 12. Applied closed the session at $529.30, up 3.5 percent from its $511.38 close a day earlier 26. Roughly $14 billion of market value moved on two press releases this week that contain no number between them 24.
The week the sell-side repriced the stock
On 13 August, Applied posted record fiscal third-quarter revenue of $9.12 billion, up 25 percent, with $3.037 billion of operating cash flow and $860 million returned to shareholders 4, and guided the fourth quarter to $10.25 billion, a midpoint 14.5 percent above the prior guide 6. The stock fell 5.1 percent the next day anyway 6. On 28 September, Morgan Stanley cut its target to $563 from $642 and its multiple to 22 times from 26, while raising its 2027 forecasts to $50.7 billion of revenue and $20.92 of EPS 3. The stock rose 5.2 percent on 29 September on that raise 7; Kioxia's EPIC entry, announced after hours, then dipped it 0.2 percent overnight, with Yahoo's write-up noting the deal "does not represent a newly disclosed equipment purchase" 7. On 1 October, Besi took the next seat 1.
The ramp is the story: a record $9.1B quarter, then a $10.25B guide
- Revenue
- Estimate
Data
| Revenue | |
|---|---|
| Q3 '24 | $7.05B |
| Q4 '24 | $7.17B |
| Q1 '25 | $7.1B |
| Q2 '25 | $7.3B |
| Q3 '25 | $6.8B |
| Q4 '25 | $7.01B |
| Q1 '26 | $7.91B |
| Q2 '26 | $9.12B |
| Q4 '26 (guide) (estimate) | $10.25B ($9.75–10.75B) |
The asterisk carries the $5 billion
Both releases bill EPIC as a $5 billion center, on a footnote: capital spending "is expected to scale over time to approximately $5 billion as customer projects commence" 18. The Kioxia release promises Applied "value sharing" from co-innovation and names no consideration 8. What a seat at this bench costs is not on the record. The gain on 1 October cannot be pinned on the release alone 2.
The guide is the anchor, not the guest list
Morgan Stanley's 22 times is still about 10 percent above Applied's through-cycle 20 since 2020, and the bank says it would be surprised by gross margins materially above the mid-50s 3. The street disagrees with itself: consensus holds Strong Buy at an average $651, with Goldman at $670 and UBS at $695 9. Management's own numbers carry the load, with packaging revenue forecast up more than 70 percent in calendar 2026 and DRAM up 52 percent in the July quarter, while clean-room space, not demand, gates 2027 shipments 6.
The street sits $88 above Morgan Stanley's $563 target
Data
| Value | |
|---|---|
| Morgan Stanley | $563 |
| Street consensus | $651 |
| Goldman Sachs | $670 |
| UBS | $695 |
November 12 settles it
The fiscal fourth-quarter print, due 12 November 2, prices the bench. Beat $10.25 billion and the multiple defends itself; miss it and the asterisk gets read aloud. Until a partner's seat comes with a purchase order, the $5 billion stays contingent on the very announcements meant to prove it 18.
Deepdive
AI-generated from this story and its cited sources. Not investment advice.
