Applied Materials Reveals Chip Sector Downturn

2 months ago

Critty Gupta

"AMAT is your ticker this morning for applied materials. Of course, the chip equipment maker that feeds into the supply chains for a lot of these chip stocks that have been, you know, just rallying quite a bit. It's a really great take on how the industry is doing and whether it actually has some momentum. Well, they came out with their earnings after the bell yesterday and they said their last quarter was not so hot and they're saying this quarter will not be so hot. So, a lot of those expectations around the chip sector really thrown um kind of under under some cold water because of their comments. They're blaming the trade restrictions with China for a good chunk of that. Basically saying that's weighing on chip demand and therefore on chip equipment as well. They're also talking about kind of the market being a little overs supplied as well. Nevertheless, their sales are dropping. They're saying there's a rebound next year come 2026. But the market's looking at this and does not believe it. Those shares down about 6% this morning, trading at about $200, $210, excuse me, and change. But the ripple effect, I think, is really interesting here because you were seeing it show up in all the the tech companies plus all the semi uh companies as I'm seeing Lamb Research, AMD, Nvidia, Intel, even Palunteer, maybe a little bit of Tesla in there. You name it. If it's a tech or a chip stock or somewhere in that universe, it's down by circa 2 to 3% this morning. And I think that's a pretty significant tone setter from applied materials."

The commentary on Applied Materials (AMAT) highlights a concerning outlook for the chip equipment sector following weak earnings and cautious guidance. The speaker points to trade restrictions with China and market oversupply as key factors weighing on demand, noting a clear market rejection of a predicted rebound in 2026. Price declines across tech and semiconductor stocks further underline a bearish sentiment.

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