NEW YORK, March 6, 2026, 05:12 EST
Applied Materials, Inc. shares fell 3.1% on Thursday to $346.53, leaving the chip-equipment maker about 12.5% below the Feb. 25 high it reached after last month’s AI-driven rally. 1
The slip matters because Applied has become one of Wall Street’s clearer plays on the AI build-out. When the company issued a stronger-than-expected outlook last month, the stock jumped 11%, and Morningstar analyst William Kerwin said, “Artificial intelligence infrastructure demand is immense, and supply is scarce.” 2
Applied had forecast second-quarter sales of about $7.65 billion, well above analysts’ estimates, and Chief Executive Gary Dickerson said the outlook was “fueled by the acceleration of industry investments in AI computing.” Timm Schulze-Melander, an analyst at Rothschild & Co. Redburn, said at the time that “memory and logic-foundry capex growth are two sides of the same coin” — capex meaning capital spending. High-bandwidth memory, or HBM, is stacked memory used alongside AI processors, while logic chips are the processors that do the computing work. 3
That wider spending story is still there. Broadcom said this week that its AI chip revenue could top $100 billion in 2027, while Reuters reported big technology companies are expected to spend at least $630 billion this year on AI infrastructure; SEMI, the industry group, has forecast global chip-equipment sales will rise 9% to $126 billion in 2026. That is the backdrop supporting Applied and U.S. peers Lam Research and KLA. 4
Applied’s own executives have leaned into that case. At a Morgan Stanley conference on March 2, Semiconductor Products Group President Prabhu Raja said, “The short answer is we are in a much, much better place,” pointing to earlier customer visibility, tighter supplier planning and factory capacity that he said could double from pre-COVID levels. He also flagged HBM packaging and 3D chiplet stacking — methods used to connect or stack advanced chips — as strong growth areas for 2026. 5
The field is getting tighter, not looser. Dutch peer ASML told Reuters earlier this week it wants a bigger role in advanced packaging for AI chips, and Chief Technology Officer Marco Pieters said “accuracy is becoming more and more important” as chip designs move toward stacked structures. That matters for Applied because advanced packaging is becoming one of the richer parts of the chip-making chain. 6
But there is a harder edge to the story. Last month, Applied agreed to pay $252 million to settle U.S. allegations that it illegally exported ion implanters, a key chipmaking tool, to China’s top chipmaker Semiconductor Manufacturing International Corp, or SMIC, through a South Korean unit. Applied has also said tighter U.S. export controls will weaken China spending in 2026, and Dickerson said the company’s China revenue share had fallen from nearly 40% to the mid-20% range because some overseas rivals could still sell where Applied could not. 7
Thursday’s market backdrop gave investors one more reason to step back. U.S. stocks closed lower as the Middle East conflict pushed oil up 8% and revived inflation worries, with the Dow down 1.61%, the S&P 500 off 0.56% and the Nasdaq lower by 0.26%. For Applied, that kind of macro jolt can still swamp a strong AI narrative, at least for a day. 8
