New York, February 4, 2026, 11:48 EST — Regular session
- Applied Materials fell sharply in late-morning trading, with chipmaking-tool peers also in the red.
- Tech has stayed jumpy after a software-led selloff tied to fresh worries about artificial intelligence.
- Attention is turning to Applied’s next results and what management says about customer spending.
Applied Materials Inc shares fell about 6% to $299.39, giving back early gains and sliding with other semiconductor equipment names as the sector weakened during the U.S. regular session. Lam Research dropped about 7.7%, ASML fell 3.4% and KLA lost about 2.1%, while the iShares Semiconductor ETF was down about 4%.
The move matters because traders have been leaning on earnings to justify big valuations, and the market is now hunting for proof that heavy spending on artificial intelligence (AI) is turning into durable demand and profits. “Strong earnings support the market’s valuations,” Sean Clark, chief investment officer at Clark Capital, said, even as parts of tech stay under pressure. Reuters
That pressure has not been subtle. “We’re seeing a lot of software companies across the spectrum get hit,” Art Hogan, chief market strategist at B. Riley Wealth, said as investors fretted that AI could intensify competition and squeeze margins for established software firms. Reuters
Semiconductors also took a fresh blow after Advanced Micro Devices tumbled on its quarterly outlook, reviving doubts over how fast challengers can close the gap with market leader Nvidia in AI chips. Bernstein analyst Stacy Rasgon said the near-term AI numbers “are not really inflecting,” pointing to a tougher setup for high expectations. Reuters
Analysts have stayed active on Applied even as the stock swings. Morgan Stanley kept its Overweight rating and raised its price target to $364 from $273 on Feb. 2, according to Yahoo Finance data on analyst actions.
Still, Wednesday’s trade showed how fast the mood can flip on chip-linked names that have tracked the AI buildout. A wide daily range in Applied’s shares suggested investors were quick to sell into strength as the broader chip complex weakened.
The risk for Applied is that customers slow orders after a burst of AI-linked spending, or that tighter U.S. export controls and geopolitics further complicate demand in China, a key market for chipmaking tools. Any hint of a softer spending cycle can land hard when expectations are high.
Applied is due to report fiscal first-quarter results on Feb. 12, and investors will be listening for guidance on tool demand, margins and the mix of logic, memory and advanced packaging work that drives its growth.
