Applied Materials Plunges 6.12 as Volume Tumbles to 208th in Market Liquidity Rankings Amid Semiconductor Supply Chain Shifts

On August 19, 2025, Applied Materials (AFLD) closed with a 6.12% decline, marking its lowest daily performance in recent weeks. The stock traded with a volume of $0.45 billion, a 59.96% drop from the previous day’s activity, ranking it 208th in terms of liquidity across the market. This sharp selloff occurred amid broader sector-specific pressures and strategic shifts within the semiconductor supply chain.

Analysts attributed the decline to recent adjustments in procurement strategies by major chip manufacturers, which have reduced near-term demand for Applied’s wafer fabrication equipment. The company’s earnings report in late July had highlighted growing client caution over capital expenditures, a trend that intensified in early August as global semiconductor inventories showed signs of overstocking. Institutional selling pressure also emerged as a key factor, with several large shareholders trimming positions ahead of quarterly reporting deadlines.

Technical indicators suggest the stock may face further downward momentum in the short term. The 50-day moving average has crossed below the 200-day line, forming a bearish "death cross" pattern. Short-term traders have increasingly adopted defensive positions, contributing to the reduced trading volume observed on August 19. However, long-term investors remain focused on Applied’s R&D pipeline, particularly its next-generation deposition systems expected to enter production by late 2025.

Backtesting of a volume-weighted trading strategy (selecting top 500 stocks by daily liquidity and holding for one day) from 2022 to present yielded 1.98% average daily returns. Over the past year, cumulative returns reached 7.61%, but the strategy demonstrated limited risk-adjusted performance, with a Sharpe ratio of 0.71. These results highlight the challenges of capitalizing on short-term liquidity-driven opportunities in the sector.