New York, Jan 31, 2026, 14:55 EST — The market has closed.
- Applied Materials dropped alongside other chip-equipment stocks following a turbulent finish to the week in the semiconductor sector.
- Traders are reassessing chip-factory spending forecasts amid a more volatile macroeconomic environment.
- Attention shifts to a packed earnings slate for tech and chipmakers, with Applied Materials’ results due mid-February.
Applied Materials shares dropped 5.6% to close at $322.32 on Friday, marking a notable slide heading into the weekend. The decline mirrored wider weakness in chip-equipment stocks, where KLA Corporation plunged 15.2% and Lam Research slipped 5.9%. The iShares Semiconductor ETF also retreated 4.1%.
Semiconductor equipment has long been a leadership sector, and it doesn’t take much to shake the group when expectations run high. Friday’s move pushed investors to question if chip-factory orders are just holding steady or actually gaining momentum again.
U.S. markets are closed for the weekend, leaving the big question: will Monday see selling continue or will buyers step in? Either way, the tape suggests investors are raising the bar for what counts as “good news.”
Wall Street’s leading indexes slipped on Friday as investors reacted to Donald Trump’s selection of Kevin Warsh to replace Jerome Powell at the Federal Reserve. Earnings reports and inflation data also factored into the market mood. “Markets are calibrating” to the announcement, noted Michael Hans of Citizens Wealth, while Angelo Kourkafas at Edward Jones pointed to “mixed tech earnings” alongside ongoing inflation concerns. (Reuters)
In chip tools, KLA’s late Thursday results set the mood. “The stock had already sprinted into the print,” noted Michael Ashley Schulman of Running Point Capital Advisors, pointing out that KLA’s March-quarter outlook suggested “steady growth rather than renewed acceleration.” (Reuters)
This impacts Applied Materials too, since the group hinges on the same key factor: wafer fabrication equipment spending — the budgets chipmakers allocate for tools in new and revamped fabs. When a bellwether signals steadier growth, the market wastes no time adjusting valuations across the board.
A Zacks research note on Thursday highlighted the flip side: Applied Materials’ stock has outpaced the broader semiconductor sector over the last six months. The gains were driven by a bounce in foundry and logic demand, along with solid growth in services and subscriptions. The report also cited robust “ICAPS” demand—chips used in industrial, communications, and automotive sectors—as a key support. (Nasdaq)
The path forward isn’t smooth. The note also flagged that escalating U.S.-China tensions and export limits on chipmaking gear might hamper growth in the near term. On top of that, a sluggish memory rebound and rising operating costs complicate the outlook further.
Next week’s calendar is packed, with semiconductors often reacting sharply. Earnings from Feb. 2–6 feature The Walt Disney Company, Advanced Micro Devices, Alphabet, Amazon.com, and Qualcomm — results that could reshape expectations around AI infrastructure demand and, in turn, the outlook for chipmakers.
l spend on factories. (Kiplinger)
Applied Materials is gearing up for its fiscal first-quarter results on Feb. 12, with an earnings call scheduled for 4:30 p.m. ET. This event will be a key moment to see if the fundamentals behind the chip-tool rally hold up against the stock’s performance. (Nasdaq)
