Applied Materials shares plunged. The lack of specific forecasts for semiconductor manufacturing equipment investment at its investor briefing, along with uncertainty over the strength of AI demand and the timing of capital spending, unsettled the market.
Applied Materials shares plunged on Tuesday, closing at $461.50. The stock fell as much as 9% intraday, marking its largest one-day decline since 28 July.
The weakness spread to the semiconductor manufacturing equipment sector, with KLA Corporation and Lam Research each falling about 4% and ASML Holding falling about 3%. With ASML Holding scheduled to report earnings on Wednesday, market interest is growing in assessing the strength of semiconductor equipment investment.
Applied Materials CEO Dickerson indicated support for long-term semiconductor manufacturing investment, seeing continued growth in AI demand, but provided no specific forecast for wafer fabrication equipment (WFE) spending. He pointed to the availability of factory space, supply chain constraints and financing for energy infrastructure as factors that could affect near-term trends.
This suggests that while AI-related demand is driving advanced semiconductor investment, the ability to gauge the timing of capital spending could have a direct impact on companies’ results. AMAT has emphasized AI’s role, while the absence of a WFE forecast has become a factor in investors’ assessment. ASML’s earnings announcement is also drawing market attention.