Applied Materials Sinks 7% as Investor Day Omits Near-Term Equipment Spending Outlook

Applied Materials fell roughly 7% on Tuesday, extending its losing streak to six consecutive sessions, after the company held an investor day at SemiCon West that set ambitious long-term targets but conspicuously declined to issue a near-term forecast for wafer fab equipment industry spending. The absence of that outlook, which analysts and investors watch closely as a barometer for chipmaker capital budgets, was treated as a sell signal and dragged the broader chip equipment sector lower, with Lam Research falling about 4.2% in sympathy.

The investor day did include a wide-ranging set of 2030 financial targets. Applied Materials said it is aiming for a 54% non-GAAP gross margin and a 40% non-GAAP operating margin by the end of the decade. The company expects service revenue to grow more than 20% in 2026 and surpass $12 billion by 2030, and its eBeam equipment portfolio to generate $2 billion in revenue this year. Applied Materials also committed to returning 80% to 100% of free cash flow to shareholders by 2030 and said it plans to more than double its R&D lab and manufacturing capacity over the same period.

Separately, the company unveiled the $5 billion EPIC Center, short for Equipment and Process Innovation and Commercialization, a semiconductor R&D facility in Sunnyvale, California. Evercore ISI reiterated its rating on the stock following the EPIC Center launch, and Cantor flagged 84% upside potential from current levels. The positive analyst commentary did little to stabilize shares on the day, as the missing near-term spending forecast dominated sentiment.

The decline unfolded against a broader semiconductor selloff. Chip stocks fell for a fifth straight session in premarket trade, weighed down partly by reports of memory chip advances from Chinese rival CXMT, before losses deepened into the close. AMD dropped 3%, Intel fell 3%, Marvell slid more than 4%, and Nvidia lost about 1.1%. Applied Materials underperformed all of those peers, closing as one of the worst performers in the chip equipment group. The S&P 500 was roughly flat and the Nasdaq slipped about 0.2% on the day.