Applied Materials, Inc (NASDAQ:AMAT) shares fell sharply on Tuesday as pressure on AI-linked semiconductor stocks intensified amid concerns over data-center spending and growth expectations.
• Applied Materials shares are retreating from recent levels. Why is AMAT stock falling?
AI Spending Concerns Weigh On Sentiment
Applied Materials dropped 6.08% after a report flagged softer sentiment around AI demand, noting OpenAI is missing internal targets for revenue and user growth.
The report said management is prioritizing cost control amid high churn while facing scrutiny over data-center investments.
It also highlighted earlier projections of $2.5 billion in advertising revenue this year and $100 billion by 2030, alongside expected spending of roughly $600 billion on computing power through 2030.
Key Supplier Caught In Semiconductor Sell-off
As the world’s largest wafer fabrication equipment maker, Applied Materials plays a central role in chip production, particularly in deposition technologies used to layer materials on wafers. Its position in the semiconductor manufacturing stack makes it sensitive to shifts in industry capital spending.
Broader Market Rotation Adds Pressure
The decline comes as investors rotate away from high-growth tech, with the Nasdaq down 1.45% and the S&P 500 off 0.75%, while Energy and Consumer Staples lead gains.
The PHLX Semiconductor Index fell nearly 5%, pulling down peers including NVIDIA Corp (NASDAQ:NVDA), Advanced Micro Devices, Inc (NASDAQ:AMD), Broadcom Inc (NASDAQ:AVGO), Intel Corp (NASDAQ:INTC), Marvell Technology, Inc (NASDAQ:MRVL).
Applied Materials’ steeper drop suggests additional pressure on semiconductor equipment names beyond the broader market weakness.
Technical Analysis
Applied Materials is still holding a strong longer-term uptrend after a big 12-month run, but Tuesday’s sell-off is testing whether buyers will defend the recent breakout zone near the top of its yearly range. The stock is trading 0.1% below its 20-day simple moving average (SMA) and 15.6% above its 100-day SMA, a mix that hints at short-term cooling while the intermediate trend remains buyer-controlled.
The moving average structure stays constructive, with the 20-day SMA above the 50-day SMA and a golden cross that formed in July 2025, which is typically consistent with trend-following support underneath pullbacks. The moving average convergence divergence (MACD), a trend/momentum indicator, remains bullish, with the MACD line above the signal line, suggesting momentum will remain positive even as price digests gains.
The 12-month gain of 153.16% shows how extended the longer-term move has been, which can make dips sharper when sentiment shifts. With the 52-week high at $407.29 and price still well above the 200-day SMA, the bigger question is whether this is a reset within an uptrend or the start of a deeper range break.
- Key Resistance: $407.50 — a level where rallies have recently stalled, and sellers may reappear.
- Key Support: $320.50 — an area where demand has tended to show up during pullbacks.
Earnings & Analyst Outlook
Following last quarter’s results, investors are now tracking the path toward the next reporting date on May 14 (confirmed).
- EPS Estimate: $2.67 (Up from $2.39 year-over-year)
- Revenue Estimate: $7.68 Billion (Up from $7.10 billion YoY)
- Valuation: P/E of 41.5x (Indicates premium valuation relative to peers)
Analyst Consensus & Recent Actions: The stock carries a Buy Rating with a consensus price target of $334.59. Recent analyst moves include:
- B. Riley Securities: Buy (Raises target to $485 on April 13)
- Susquehanna: Positive (Raises target to $500 on April 9)
- Morgan Stanley: Overweight (Raises target to $432 on Feb. 25)
Top ETF Exposure
- iShares Semiconductor ETF (NASDAQ:SOXX): 5.84% Weight
- Invesco Semiconductors ETF (NYSE:PSI): 4.84% Weight
- Parnassus Core Select ETF (NYSE:PRCS): 7.50% Weight
Significance: Because Applied Materials carries such a heavy weight in these funds, any significant inflows or outflows will likely trigger automatic buying or selling of the stock.
AMAT Price Action
AMAT Stock Price Activity: Applied Materials shares were down 6.45% at $378.68 at the time of publication on Tuesday, according to Benzinga Pro data.
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