Applied Materials, Inc. AMAT shares are trading lower by 10.2% to $192.15 Tuesday afternoon, in possible sympathy with ASML, which fell after issuing soft guidance. Some stocks in the industry may also be down on reports indicating the U.S. is discussing curbing chip exports to some countries.
What’s Happening: ASML's early release of its third-quarter earnings report, combined with a downgraded 2025 sales outlook, sent shockwaves through the broader 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), down from the previously anticipated €30 billion to €40 billion, raised concerns about slower-than-expected recovery in key market segments.
While ASML highlighted ongoing demand for artificial intelligence (AI)-driven chips, it also pointed to lagging recovery in other critical markets, leading to customer caution in the face of prolonged macroeconomic uncertainty.
For Applied Materials, which relies heavily on global chipmakers to invest in new semiconductor fabrication technologies, the news from ASML is particularly concerning.
Both companies are integral to the global semiconductor supply chain, with Applied Materials specializing in materials engineering solutions for advanced chips, including the deposition and patterning processes essential 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.
What Else: The semiconductor industry is highly cyclical, and companies like Applied Materials are deeply intertwined with capital expenditure cycles of chipmakers.
With ASML reducing its outlook, there are now heightened fears 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.
Applied Materials, as a key player in this sector, was 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 Buy AMAT Stock
Besides going to a brokerage platform to purchase a share – or fractional share – of stock, you can also gain access to shares either by buying an exchange traded fund (ETF) that holds the stock itself, or by allocating yourself to a strategy in your 401(k) that would seek to acquire shares in a mutual fund or other instrument.
For example, in Applied Materials’ case, it is in the Information Technology sector. An ETF will likely hold shares in many liquid and large companies that help track that sector, allowing an investor to gain exposure to the trends within that segment.
According to data from Benzinga Pro, AMAT has a 52-week high of $255.89 and a 52-week low of $129.23.
© 2024 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.
Comments
Trade confidently with insights and alerts from analyst ratings, free reports and breaking news that affects the stocks you care about.
