Why did AMAT's EPS surprise shrink in Q1 2025?

Applied Materials Inc. (AMAT) experienced a decrease in EPS surprise in Q1 2025 due to several factors:

1. Higher Expenses: The decrease in profit margin was driven by higher expenses, which negatively impacted the net income and, consequently, the EPS. This suggests that the company faced increased costs that were not fully offset by revenue growth.
2. Geopolitical Factors: The company's ability to serve the China market is constrained by updated trade rules, resulting in an estimated $400 million revenue impact in fiscal 2025. These trade-related headwinds and the associated revenue impact likely contributed to the reduced EPS surprise.

In summary, the combination of higher expenses and geopolitical factors significantly impacted AMAT's EPS in Q1 2025, leading to a decrease in EPS surprise.