Key Stats for AMAT Stock
- 1-Day Price Change for AMAT stock: -14%
- Current Share Price: $162
- 52-Week High: $216
- AMAT Stock Price Target: $200
What Happened?
Applied Materials (AMAT) shares plummeted 14% on Friday after the semiconductor equipment giant delivered disappointing fourth-quarter guidance that fell well short of Wall Street expectations.
AMAT projected adjusted earnings per share of $2.11 versus the $2.39 consensus estimate, while revenue guidance of $6.7 billion came in significantly below the expected $7.34 billion.
CEO Gary Dickerson cited “increasing uncertainty and lower visibility” driven by the current macroeconomic backdrop and trade issues, particularly affecting its China business.
The guidance assumes no approvals for pending export license applications and reflects what management called “digestion of capacity in China” following rapid equipment investments in 2023 and 2024.
Adding to the weakness, Applied Materials reported nonlinear demand from leading-edge customers, which it attributed to market concentration and fab timing issues.
Despite these headwinds, the company did beat third-quarter estimates with adjusted earnings of $2.48 per share on $7.3 billion in revenue.
See analysts’ growth forecasts and price targets for AMAT stock (It’s free!) >>>
What the Market Is Telling Us About AMAT Stock
The sharp selloff in AMAT stock suggests investors are concerned about Applied Materials’ near-term visibility challenges and exposure to geopolitical uncertainties.
Bank of America analyst Vivek Arya downgraded AMAT stock to neutral, noting that “the uncertainty could persist, making it tougher for the stock to outperform despite a reasonable valuation.”
With China representing 35% of revenue in the most recent quarter but expected to drop to just 29% in Q4, it faces headwinds from both trade restrictions and customer spending patterns.
The market appears to be pricing in extended weakness rather than viewing this as a temporary blip, particularly given management’s indication that China digestion could last “several more quarters.”
While Applied Materials maintains strong positioning in AI-enabling technologies like gate-all-around transistors and advanced packaging, investors are clearly focused on the immediate demand challenges rather than long-term growth prospects.
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Disclaimer:
Please note that the articles on TIKR are not intended to serve as investment or financial advice from TIKR or our content team, nor are they recommendations to buy or sell any stocks. We create our content based on TIKR Terminal’s investment data and analysts’ estimates. Our analysis might not include recent company news or important updates. TIKR has no position in any stocks mentioned. Thank you for reading, and happy investing!
