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Applied Materials slides after investors question growth versus chip rivals
The chip equipment maker forecast fourth-quarter revenue of about $10.25 billion, but the stock fell roughly 4% as investors focused on whether its growth is keeping pace with peers.
Applied Materials shares fell about 4% in early trading on Friday, even after the company delivered an upbeat outlook that failed to calm investor worries about intensifying competition in wafer-fab equipment.
Reuters reported that the muted response reflects the high bar for chip stocks after Applied’s shares have more than doubled this year. Investors are looking for clearer evidence that Applied’s growth is outpacing rivals such as ASML and Lam Research.
The company forecast fourth-quarter revenue of about $10.25 billion, ahead of a $9.54 billion consensus estimate, and it expected its margin to stay steady at 50.4% in the October quarter. Summit Insights Group said Applied’s topline performance has lagged peers, and LSEG data showed the stock is valued at 32.14 times expected earnings over the next 12 months, compared with higher multiples for Lam, KLA, and ASML.
Morgan Stanley said a flat outlook was not a major concern given capacity expansion, but it leaves the company exposed to investor demands. Reuters also noted that Lam and KLA posted upbeat results last month, while ASML raised its 2026 outlook.