New York, Feb 12, 2026, 13:27 (EST) — Regular session.
- Applied Materials shares slip as investors digest a U.S. export-control settlement and brace for earnings later Thursday
- U.S. Commerce Department says the company shipped chipmaking tools to China without required licences; DOJ and SEC reviews are closed
- Traders are watching guidance on China exposure and memory-led demand as tech stocks trade lower
Applied Materials (AMAT.O) shares fell about 3% to $329.85 in midday trading on Thursday, after touching a session high of $340.70. The stock was last down $10.03, after closing at $339.88 in the prior session.
An SEC filing showed the chip-equipment maker agreed to pay $252.5 million in a one-time settlement with the U.S. Commerce Department’s Bureau of Industry and Security (BIS). The filing said the Justice Department and the Securities and Exchange Commission have closed their respective inquiries without taking enforcement action. (SEC)
That clears a legal cloud, but it lands right before a key print. Analysts expect adjusted profit of $2.21 per share on revenue of about $6.88 billion, and options — contracts that let traders bet on price swings — implied the market was braced for roughly a 6% move after earnings. (Investopedia)
The Commerce Department said Applied and its South Korean unit shipped ion implanters — tools used to embed dopant atoms into silicon wafers — to Semiconductor Manufacturing International Corp after the Chinese foundry was added to the U.S. “Entity List,” a trade-restriction list that typically requires export licences. The department said the company made 56 shipments in 2021 and 2022 worth about $126 million, routing the equipment through South Korea. (Reuters)
BIS called the penalty the second-highest it has ever imposed and said it was the maximum allowed by statute, equal to twice the transaction value. “When companies export their products around the world, they must follow the law or face stiff penalties,” Under Secretary Jeffrey Kessler said. BIS said Applied agreed to multiple audits and annual certifications, and that compliance employees and senior trade and production executives tied to the shipments are no longer employed by the company and its Korean unit. (Bureau of Industry and Security)
Applied said the shipments cited by BIS stemmed from a misunderstanding about how U.S. export rules applied to certain customer orders to China between November 2020 and July 2022. It reiterated its commitment to export-control and trade-compliance practices and said it is focused on executing its technology roadmap now that the matter is closed. (SEC)
The settlement also lands after a burst of corporate messaging on longer-term growth. On Wednesday, Applied said Samsung Electronics will join its $5 billion EPIC research center in Silicon Valley, aimed at joint work on next-generation chipmaking processes. “The global buildout of AI infrastructure is driving unprecedented demand for energy-efficient chips,” Applied CEO Gary Dickerson said. (GlobeNewswire)
Thursday’s broader tape was heavy, too. The Nasdaq was down about 1.6% and the Philadelphia SE Semiconductor index fell about 1.7% as investors pressed companies to show returns on AI spending. “We see this as a ‘prove it’ year for AI,” said Jack Herr, primary investment analyst at GuideStone Funds, with the Consumer Price Index (CPI) inflation report due on Friday. (Reuters)
Some investors are also watching whether a memory up-cycle can offset policy drag. Lynx Equity Strategies wrote that a DRAM (a type of memory chip) capital-spending cycle could help results, but it may not close Applied’s performance gap with rival Lam Research. (Investing.com Canada)
But the settlement does not end the policy risk around China. Any further tightening of licensing or a shift in enforcement can hit equipment makers quickly, and guidance that suggests order pauses would likely sting. How the $252.5 million payment is reflected in results and outlook is another swing factor.
Next up is Applied’s quarterly report after market close on Thursday, when executives will face questions on China exposure, compliance controls and the demand outlook for semiconductor tools and services. (Wsj)
