JPMorgan said the third quarter delivered solid results, but the lower guidance was primarily due to a pullback in China’s capital expenditures after years of heavy investment.
Applied Materials Inc. (AMAT) has become a focal point among Wall Street analysts after delivering better-than-expected third-quarter (Q3) results, but issuing softer guidance for the next quarter.
The semiconductor equipment manufacturer beat revenue and earnings estimates. Still, its fourth-quarter (Q4) outlook evoked a cautious reaction, primarily due to an expected slowdown in China and reduced demand for advanced logic and memory chips. The company expects Q4 revenue of $6.7 billion +/-$500 million and an adjusted earnings per share (EPS) of $2.11 +/-$0.20, against the consensus estimate of $7.18 billion and $2.31, respectively, as per Fiscal AI data.
Applied Materials stock traded over 14% lower in Friday’s premarket. However, on Stocktwits, retail sentiment improved to ‘extremely bullish’ from ‘bullish’ territory. Message volume shifted to ‘extremely high’ from ‘normal’ levels in 24 hours.
The stock saw a 2,400% explosion in user message count in 24 hours. A bullish Stocktwits user said the price movement is an ‘overreaction’.
Morgan Stanley analyst Shane Brett raised the firm’s price target on the stock to $172 from $169, maintaining an ‘Equal Weight’ rating, as per TheFly. Brett pointed to stronger-than-anticipated revenue contributions from China in Q3 but noted concerns over the company’s share position with TSMC and questions surrounding reliance on China’s ICAPS (IoT, communications, automotive, power, and sensors) segment.
JPMorgan lifted its price target to $220 from $210 and kept an ‘Overweight’ rating. The firm said the Q3 delivered solid results, but the lower guidance was primarily due to a pullback in China’s capital expenditures after years of heavy investment.
Stifel analyst Brian Chin took a more cautious stance, cutting his price target to $180 from $195 while reiterating a ‘Buy’ rating. Chin said the Q3 performance surpassed expectations but flagged the company’s Q4 forecast as weaker than anticipated. He attributed this to demand digestion in China and less momentum in next-generation foundry and logic processes.
Applied Materials’ stock has gained over 15% in 2025 and has lost over 11% in the past 12 months.
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