New York, Feb 12, 2026, 13:27 (EST) — The session is now in progress.
- Applied Materials shares dipped as investors weighed a U.S. export-control settlement ahead of earnings due Thursday
- The U.S. Commerce Department says the company exported chipmaking equipment to China without the necessary licenses; DOJ and SEC investigations have concluded.
- Traders are closely monitoring guidance on China exposure alongside memory-driven demand as tech stocks slip lower
Applied Materials (AMAT.O) shares dropped roughly 3% to $329.85 during midday trading Thursday, slipping from a session peak of $340.70. The stock was last down $10.03, following a close at $339.88 in the previous session.
An SEC filing revealed the chip-equipment manufacturer agreed to a $252.5 million one-time settlement with the U.S. Commerce Department’s Bureau of Industry and Security (BIS). According to the filing, both the Justice Department and the Securities and Exchange Commission have closed their investigations without pursuing enforcement actions. 1
That removes a legal hurdle but comes just ahead of a crucial earnings report. Analysts are forecasting an adjusted profit of $2.21 per share on revenues near $6.88 billion. Meanwhile, options—contracts allowing traders to speculate on price changes—suggest the market is gearing up for about a 6% move post-earnings. 2
The Commerce Department reported that Applied Materials and its South Korean unit shipped ion implanters—devices that insert dopant atoms into silicon wafers—to Semiconductor Manufacturing International Corp after the Chinese chipmaker was placed on the U.S. “Entity List,” which usually demands export licenses. According to the department, the company made 56 shipments in 2021 and 2022 valued at around $126 million, funneling the equipment through South Korea. 3
BIS described the penalty as the second-largest in its history, hitting the maximum allowed by law—twice the transaction value. “Companies exporting globally must obey the law or face tough consequences,” said Under Secretary Jeffrey Kessler. BIS noted Applied consented to several audits and yearly certifications. The compliance staff and senior trade and production officials involved in the shipments have since left the company and its Korean branch. 4
Applied explained that the shipments flagged by BIS resulted from confusion over how U.S. export regulations applied to some customer orders destined for China between November 2020 and July 2022. The company reaffirmed its dedication to export controls and trade compliance and emphasized its focus on advancing its technology roadmap now that the issue is resolved. 5
The settlement arrives amid a flurry of corporate updates focused on long-term growth. On Wednesday, Applied announced that Samsung Electronics will join its $5 billion EPIC research center in Silicon Valley, collaborating on next-gen chipmaking processes. Applied CEO Gary Dickerson highlighted the surge in demand for energy-efficient chips driven by the global expansion of AI infrastructure. 6
The broader market took a hit Thursday. The Nasdaq slipped roughly 1.6%, while the Philadelphia SE Semiconductor index dropped about 1.7% as investors demanded proof of returns on AI investments. “We see this as a ‘prove it’ year for AI,” said Jack Herr, primary investment analyst at GuideStone Funds, ahead of Friday’s Consumer Price Index (CPI) inflation report. 7
Some investors are keeping an eye on whether a memory up-cycle can counterbalance policy headwinds. Lynx Equity Strategies noted that a DRAM capital-spending cycle might boost results but likely won’t close Applied’s performance gap with competitor Lam Research. 8
The settlement doesn’t erase the policy risks tied to China. If licensing rules tighten or enforcement shifts, equipment makers could take a hit fast. Guidance hinting at order slowdowns would also hurt. Plus, how the $252.5 million payment shows up in results and forecasts adds another layer of uncertainty.
Applied’s quarterly report drops after market close Thursday. Executives are expected to field questions on China exposure, compliance controls, and demand trends for semiconductor tools and services. 9
