NEW YORK, August 14, 2026, 06:26 EDT — U.S. cash markets remained shut, while premarket activity stayed brisk.
- Nasdaq 100 futures added 0.1% following an 0.81% increase for the Nasdaq Composite on Thursday.
- Applied Materials dropped 4.9%, although it surpassed estimates for both revenue and adjusted profit.
- The stock’s forward P/E lags behind three major equipment competitors, yet its growth needs to align.
Nasdaq 100 futures rose 0.1% on Friday while Applied Materials NASDAQ:AMAT slid 4.9% to $508.30. The divergence highlights that broad AI enthusiasm for the index can occur even as some individual suppliers face tougher scrutiny.
The Nasdaq Composite finished Thursday at 26,803.03, rising 0.81%. Futures for Friday subsequently showed a modest increase. As a result, Applied’s drop appeared particular to the company, rather than reflecting a generalized move away from technology stocks.
| Market gauge | Latest reading | Change | Timing |
|---|---|---|---|
| Nasdaq Composite | 26,803.03 | +0.81% | Thursday close |
| Nasdaq 100 futures | Not quoted | +0.1% | Friday premarket |
| Applied Materials | $508.30 | -4.9% | Friday premarket |
Applied reported robust operational performance. Revenue for its fiscal third quarter climbed 25% to $9.12 billion. Adjusted earnings stood at $3.50 per share, surpassing the $3.40 consensus estimate.
| Applied Materials metric | Company result or midpoint | Street estimate | Beat |
|---|---|---|---|
| Q3 revenue | $9.12 billion | $8.99 billion | 1.4% |
| Q3 adjusted EPS | $3.50 | $3.40 | 2.9% |
| Q4 revenue outlook | $10.25 billion | $9.54 billion | 7.4% |
| Q4 adjusted EPS outlook | $4.02 | $3.69 | 8.9% |
The outlook also set expectations. Applied projected fourth-quarter revenue at $10.25 billion, give or take $500 million. The midpoint for adjusted earnings was $4.02 per share.
Still, investors prioritised comparative growth. Summit Insights Group noted that Applied’s revenue growth trailed behind ASML Holding NASDAQ:ASML and Lam Research NASDAQ:LRCX. According to Morgan Stanley, while the unchanged margin outlook was not cause for concern, it maintained pressure on the management team to achieve results.
| Equipment supplier | Forward P/E | Premium to Applied | Recent read-through |
|---|---|---|---|
| Applied Materials | 32.14x | — | Forecast upbeat; shares lower |
| Lam Research | 34.59x | 7.6% | Latest results upbeat |
| KLA NASDAQ:KLAC | 36.85x | 14.7% | Latest results upbeat |
| ASML Holding | 33.39x | 3.9% | 2026 outlook increased |
Applied’s shares are valued at 32.14 times projected earnings over the next 12 months, pricing in a 7% discount to Lam and a 13% discount to KLA. This gap gives some valuation backing, while also reflecting investor caution over momentum in gaining market share.
Advanced packaging continues to be the main driver. Applied now projects packaging revenue growth above 70% in 2026, up from its previous forecast of over 50%, marking a 20-point rise.
Chief Financial Officer Brice Hill stated that conversations with customers are now reaching as far as 2030. He also anticipates robust growth in the second half for DRAM, advanced foundry logic, and advanced packaging. These orders are important, as they could shift the current valuation discount into a period of accelerated revenue growth.
| Analyst | Recommendation | Target | Reference date | Upside/downside versus $508.30 |
|---|---|---|---|---|
| Cantor Fitzgerald | Overweight | $575 | May 15 | +13.1% |
| Wolfe Research | Outperform | $550 | May 15 | +8.2% |
| Morgan Stanley | Overweight | $502 | May 15 | -1.2% |
| Argus | Buy | $500 | May 19 | -1.6% |
The recommendation table is based on data available before Thursday’s results. It highlights continued divergence in analyst expectations. Cantor and Wolfe set price targets above current levels, suggesting potential gains, while targets from Morgan Stanley and Argus remain below Friday’s premarket price.
CFRA analyst Brooks Idlet described the results as strong. He noted that 2027 consensus forecasts might allow for potential upside, provided that current momentum continues. The main challenge now, he said, is for execution to confirm the prolonged demand signals.
The following key macroeconomic data arrives Friday, with July retail sales scheduled for release at 08:30 EDT. The Census Bureau describes this figure as an advance estimate, indicating the potential for later revisions to alter the initial reading.
Risks: A disappointing retail report may impact the Nasdaq ahead of the opening bell. For Applied, reduced fab investment, increased competition, or postponed capacity expansions could offset gains from packaging growth.
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