Applied Materials ( (AMAT) ) has fallen by -12.27%. Read on to learn why.
Elevate Your Investing Strategy:
- Take advantage of TipRanks Premium at 50% off! Unlock powerful investing tools, advanced data, and expert analyst insights to help you invest with confidence.
Applied Materials experienced a significant stock price decline of 12.27% over the past week, primarily due to a disappointing fourth-quarter guidance for Fiscal Year 2025. The company reported a 4.9% drop in revenue and a 9% decrease in adjusted earnings per share compared to the previous year, leading to a sharp sell-off. This negative outlook prompted several financial institutions, including Bank of America, to downgrade their ratings, citing concerns about the company’s exposure to oversupplied segments and key customers like Intel.
Despite the earnings beat in the third quarter, where Applied Materials reported earnings per share of $2.48, surpassing analysts’ expectations, the future outlook overshadowed these results. The company’s guidance for the fourth quarter fell short of market expectations, with projected revenue of $6.7 billion and adjusted earnings per share of $2.11, both lower than anticipated. Analysts expressed concerns about the company’s concentration in struggling areas of the semiconductor cycle, which could hinder its performance.
While some analysts remain optimistic about Applied Materials, with Needham maintaining a Buy rating and a bullish price target of $240 per share, others are more cautious. The consensus among analysts is a Moderate Buy, with an average price target of around $205. However, the recent earnings report and guidance have led to a reevaluation of these estimates, contributing to the stock’s recent decline.