Applied Materials, Inc. (AMAT) shares took a nosedive on Tuesday, plummeting by over 10% to $192.15, mirroring the broader semiconductor industry’s downturn. This sharp decline comes on the heels of ASML’s disappointing earnings report, which included a lowered sales outlook for 2025, and reports suggesting the U.S. is considering curtailing chip exports to certain countries.
ASML’s early release of its third-quarter earnings report, accompanied by a downgraded 2025 sales forecast, sent shockwaves through the semiconductor industry, including Applied Materials. ASML’s revised sales guidance, which lowered its 2025 revenue expectations to a range of €30 billion to €35 billion ($32.7 billion to $38.2 billion) from the previously anticipated €30 billion to €40 billion, raised concerns about a slower-than-expected recovery in key market segments. While ASML highlighted continued demand for artificial intelligence (AI)-driven chips, it also pointed to lagging recovery in other critical markets, leading to customer hesitancy in the face of persistent macroeconomic uncertainty.
For Applied Materials, which relies heavily on global chipmakers investing in new semiconductor fabrication technologies, the news from ASML is particularly concerning. Both companies are essential to the global semiconductor supply chain, with Applied Materials specializing in materials engineering solutions for advanced chips, including the deposition and patterning processes crucial for next-generation semiconductors. Any slowdown in the broader chip equipment market, as signaled by ASML’s cautious outlook, directly impacts Applied Materials’ future revenue prospects.
The semiconductor industry is known for its cyclical nature, and companies like Applied Materials are intricately intertwined with chipmakers’ capital expenditure cycles. With ASML lowering its outlook, fears are mounting of a broader pullback in spending across the industry, potentially affecting Applied Materials’ orders for the advanced tools needed to produce increasingly complex semiconductor designs, such as those used in AI and high-performance computing. As a key player in this sector, Applied Materials is not immune to this downturn, exacerbating concerns over the timing of the industry’s recovery from previous supply chain disruptions and weaker demand from sectors such as consumer electronics.
How to Invest in AMAT Stock
Beyond the traditional approach of purchasing shares or fractional shares through a brokerage platform, investors can also gain exposure to AMAT stock through other avenues. Consider investing in an exchange traded fund (ETF) that holds AMAT shares or allocating funds within your 401(k) to a strategy that targets acquiring shares in a mutual fund or other financial instrument. Applied Materials falls within the Information Technology sector, and an ETF focused on this sector will likely hold shares in many liquid and large companies, providing investors with exposure to the trends within this segment.
According to data from Benzinga Pro, AMAT has a 52-week high of $255.89 and a 52-week low of $129.23.