NEW YORK, March 4, 2026, 14:47 (EST)
- Applied Materials bounced back 1.9% in afternoon trading, clawing back some ground after Tuesday’s 5.6% slide.
- Chipmakers, facing persistent demand, are pushing for timely tool deliveries, an executive said.
- Chip equipment stocks still face major uncertainty from export controls and ongoing geopolitical shocks.
Applied Materials Inc rebounded 1.9% to $357.97 by Wednesday afternoon, clawing back some ground after tumbling 5.6% the previous day and ending at $351.32.
This is a big deal: chipmaking tools form the bottleneck for AI-driven data-center expansion. Any delay in tool shipments drags down chip production too, upending the spending cycle.
Scaling up factories and service teams quickly—without sacrificing margins—remains a sticking point for equipment makers, investors say. Last time things got tight, that’s where the pain showed up, and the issue hasn’t gone away.
Speaking at the Morgan Stanley Technology, Media & Telecom Conference on Monday, Prabhu Raja—who heads Applied’s Semiconductor Products Group—said demand right now “is very high,” with customers pressing for assurances that they’ll get their tools delivered on schedule. Some customers are planning far ahead, giving Applied visibility “two years early.” Raja also noted that the company’s manufacturing capacity “should double” from pre-COVID-19 levels as it monitors roughly 100 fabs, or chip factories, at different stages of development. According to Raja, customers are pushing Applied to prepare for a “super cycle,” flagging the increasing complexity of new transistor designs like gate-all-around, which wraps the gate around the channel and can stretch the process flow to over 2,000 steps. Investing.com
Stocks took a hit Tuesday, with the S&P 500 finishing 0.9% lower. Concerns over a widening conflict with Iran lifted oil prices and spooked investors, dragging U.S. equities broadly into the red.
Applied’s forecast keeps it right in the thick of the AI-chip spending story, lumped in with other gear suppliers handling crucial process steps. When capital spending views shift, investors usually trade the whole group as a package.
Applied projected second-quarter revenue at roughly $7.65 billion, give or take $500 million, with adjusted earnings landing at $2.64 a share, plus or minus 20 cents, in its Feb. 12 report. Both figures came in above what analysts polled by LSEG had expected. CEO Gary Dickerson pointed to “the acceleration of industry investments in AI computing” as the driving force behind the performance. A Redburn analyst at Rothschild & Co. described memory and logic-foundry outlays as “two sides of the same coin.” Reuters
Morningstar’s senior equity analyst William Kerwin weighed in after the outlook, calling for “a massive wafer fabrication equipment growth cycle over the next three years.” The analyst highlighted the scale of artificial intelligence infrastructure demand, which he described as “immense,” with “supply… scarce.” Reuters
Still, policy hurdles and geopolitics aren’t going away. The U.S. Department of Commerce hit Applied with a $252 million settlement tied to illegal chipmaking equipment exports to China’s SMIC. Applied, for its part, noted that the Justice Department and SEC had wrapped up their own probes without further action.
Applied’s got another event lined up for investors. In a Feb. 17 release, the company announced CFO Brice Hill is set to speak at the Cantor Fitzgerald Global Technology & Industrial Growth Conference on March 10. A live webcast—and the replay—will be available on its investor site.
