Applied Materials Stock Plunges 14.41% on China Demand Slowdown

On August 15, 2025, Applied Materials' stock experienced a significant drop of 14.41% in pre-market trading.

Applied Materials' fourth-quarter revenue and profit forecasts fell short of estimates, primarily due to weak demand in China and unpredictable orders from customers. The company cited a pause in customer purchases in China and at leading-edge foundries, which has led to an expected sequential drop in revenue and non-GAAP diluted EPS. This pause is attributed to oversupply and inventory adjustments following earlier demand surges, as well as export regulations and geopolitical uncertainties.

CEO Gary Dickerson highlighted the increased uncertainty and lower visibility in the near term, noting the wide-ranging implications for the semiconductor industry due to the dynamic policy environment. China, which accounted for 35% of Applied Materials' sales in the July quarter, has become a growing risk as U.S. export restrictions impact new orders for chipmaking tool suppliers.

Despite the challenges, some analysts view the slowdown in China demand and erratic orders as more of a timing issue rather than a structural problem. The company's third-quarter revenue rose 8% to $7.30 billion, surpassing estimates of $7.22 billion. However, the stock has faced significant volatility due to these uncertainties, reflecting the broader concerns in the semiconductor industry.