Applied Materials shares plunged 12.71% on Friday, opening at $164.31 compared to Thursday’s close of $188.24. The semiconductor equipment maker’s stock decline came despite beating third-quarter expectations with revenue of $7.30 billion, up 8% year-over-year, and adjusted earnings of $2.48 per share, both above consensus estimates.<\/p>\n
The selloff was triggered by conservative fourth-quarter guidance that fell short of analyst expectations. Management forecast revenue of approximately $6.70 billion, well below the $7.33 billion analyst consensus, while projected adjusted earnings per share of $2.11 missed the $2.39 estimate. CFO Brice Hill cited sluggish Chinese demand and uneven orders, while CEO Gary Dickerson pointed to increased macroeconomic and trade-policy uncertainty, particularly regarding export licenses to China.<\/p>\n
The weak outlook prompted several analyst downgrades. Bank of America downgraded Applied Materials to Neutral from Buy and cut its price target to $180, citing company-specific headwinds including weak demand visibility and China-related pressure. Summit Insights also downgraded the stock to Hold from Buy, warning that U.S. export restrictions could drive pull-in orders in China, creating excess capacity that may take several quarters to resolve.<\/p>\n
Stifel maintained its Buy rating but lowered its price target to $180 from $195, with analyst Brian Chin noting that while long-term fundamentals remain sound, near-term guidance warrants a more conservative valuation.<\/p>\n
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