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Investing.com - Summit Insights downgraded Applied Materials (NASDAQ:AMAT), a prominent semiconductor equipment manufacturer with a $151 billion market cap, from Buy to Hold on Friday, citing concerns about export restrictions to China and broader market headwinds. The company, currently trading at a P/E ratio of 22.9x, has demonstrated steady revenue growth of 6% over the last twelve months.
The research firm believes U.S. government export restrictions to China have likely driven pull-ins from Chinese customers, leading to excess capacity that may take several quarters to digest.
Summit Insights also pointed to uncertainty around Intel’s 18A and 14A nodes as creating further headwinds for wafer fabrication equipment (WFE) suppliers like Applied Materials.
The firm noted that muted demand across PCs, smartphones, consumer electronics, and industrial/automotive markets is expected to offset AI-related strength in the semiconductor industry.
Summit Insights anticipates that 2026 WFE spending will remain soft and expects semiconductor capital equipment companies, including Applied Materials, to underperform the broader semiconductor peer group in the coming quarters. Despite this downgrade, the broader analyst community maintains a positive outlook, with price targets ranging from $165 to $250, reflecting potential opportunities ahead.
In other recent news, Applied Materials Inc. reported its financial results for the third quarter of fiscal 2025, surpassing analysts’ expectations. The company achieved earnings per share of $2.48, beating the forecast of $2.36. Revenue for the quarter was $7.3 billion, exceeding the anticipated $7.22 billion. These results indicate a stronger-than-expected performance for the company. Despite these positive earnings and revenue figures, the stock experienced a decline in trading. In addition to financial results, there have been no recent announcements regarding mergers involving Applied Materials. Analyst firms have not provided any recent upgrades or downgrades for the company. These developments are part of the latest updates concerning Applied Materials.
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