New York, Jan 20, 2026, 18:54 ET — After-hours
- Applied Materials dropped roughly 2.7% Tuesday, tracking the wider market decline.
- A Needham analyst raised his price target to $390, pointing to stronger demand indicators.
- Next week’s earnings from chip-equipment makers might shape the sector’s trajectory.
Applied Materials shares dropped 2.7% to $318.23 on Tuesday, then held steady in after-hours trading.
The drop is significant since the stock remains close to recent peaks following a strong January rally, leaving limited buffer for negative surprises. The sell-off coincided with a risk-off day on Wall Street, where the S&P 500 fell 2.06%, as investors rushed to offload popular semiconductor positions. 1
Applied’s shares fluctuated from $314.58 up to $324.35, with roughly 9.4 million shares changing hands throughout the session.
The broader chip sector also lost ground. The iShares Semiconductor ETF dropped roughly 1.5%, and the VanEck Semiconductor ETF dipped around 2.5%. Individual names showed uneven moves — KLA tumbled 5.3%, while Lam Research edged down just 0.2%.
The pullback happened despite Needham’s Charles Shi boosting his price target on Applied from $260 to $390, maintaining a “Strong Buy” rating. Shi cited what he described as “broad-based” demand gains over the last 90 days, based on insights from the Needham Growth Conference. 2
The conference concluded last week, serving as a routine checkpoint for management teams and investors to exchange updates on order trends and spending intentions. 3
Still, a higher target hasn’t halted the tape-driven selloff. Traders are weighing whether the upbeat chatter about tool demand will quickly translate into bookings and better margins—or if the stock is just taking a breather after a solid rally.
Export rules and licensing restrictions tied to China remain a major risk, even as demand looks solid in other regions. Applied has previously cautioned that tougher U.S. sanctions might slash revenue, a factor keeping investors cautious when the stock’s valuation climbs. 4
Next week, expect new insights from the equipment sector. ASML is set to release its results on Jan. 28, a key indicator for investment in cutting-edge chip manufacturing. 5
KLA is set to release its report on Jan. 29. Investors closely watch its commentary for clues on process-control demand and how busy fabs are running. 6
Applied is gearing up for its next big event: the fiscal first-quarter earnings report, slated for Feb. 12, according to the company’s investor relations calendar. 7
