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Investing.com -- Applied Materials shares fell 2.5% in premarket trading on Friday after the chip equipment maker warned of a revenue impact from a new U.S. export control measure.
In a Thursday filing, the company said the Bureau of Industry and Security’s new affiliate rule will cut about $110 million from its fiscal fourth-quarter sales and around $600 million from fiscal 2026 revenue.
Bernstein analysts noted the rule “expands end user controls to cover ‘affiliates’ of companies on the entity list … as well as entities 50%+ owned by military end users and other sanctioned parties.”
Bernstein described the immediate hit as modest. “For FQ4 $110M is less than 2% of the current $6.7B revenue guide, and ~6% of anticipated China revenues,” the analysts wrote, adding that the fiscal 2026 impact equates to “~2% of current consensus revenue (~$29.1B) and likely mid to HSD % of China sales (assuming a 25-30% mix), and probably ~30 cents or so, ~3% of current consensus EPS at $9.57.”
The firm said the measure “is annoying, but seems fairly incremental, and more of a ‘clean-up’ than anything hugely new.” It also suggested the change might reduce the need for future updates to the entity list.
Bernstein expects other U.S. semiconductor equipment makers could be affected, though Applied Materials is the first to quantify the hit.
“We doubt AMAT will be the only US semicap player impacted here,” the note said.
Despite the setback, Bernstein maintained an Outperform rating on the stock with a $195 price target.
The analysts argue that “prospects for WFE recovery, especially in memory/DRAM … feel like much bigger potential drivers than an incremental shaving of China exposure.”