Applied Materials Plunges 4% Pre-Market as US Export Curbs Choke China Revenue

Another day, another tech giant caught in the US-China crossfire.

Applied Materials—the semiconductor equipment maker that keeps Silicon Valley's fabs humming—just took a 4% nosedive in pre-market trading. Blame Washington's latest export restrictions, which are tightening the screws on its lucrative China business.

Wall Street's reaction? A collective shrug—because what's another $2 billion market cap vaporized between friends?

Meanwhile in Beijing: Local chipmakers are already 'innovating' workarounds. Because nothing sparks creativity like American sanctions.

Bottom line: In the high-stakes poker game of tech sovereignty, Applied Materials just got dealt another losing hand. But hey—at least the short-sellers are having a field day.

Export curbs on China pressure Applied Materials

Applied Materials, a key equipment supplier closely watched by investors, is in the crosshairs as the US cracks down on companies using subsidiaries and affiliates to circumvent the restriction on sales of cutting-edge chipmaking equipment and technology to Chinese manufacturers, which led to its shares falling by 4% in after-hours trading.

Due to the tighter restrictions, Applied Materials forecasts a $600 million loss to its 2026 revenue. Despite announcing a $2.35 billion deal on senior secured notes to improve its liquidity, it is grappling with significant revenue pressure from the slowing Chinese market. 

Other suppliers are also expected to take a hit to revenue, since China is the world’s largest buyer of chip-making equipment. 

Applied Materials had reported that $110 million worth of products were not shipped in Q4 due to a rule, which was later suspended following talks between President TRUMP and President Xi Jinping. 

Executives expect that the suspension of the rule could also enable it to recoup the projected $600 million loss in the next fiscal year. However, analysts believe it won’t have a huge impact since China’s sales currently represent 20% of its revenue, down from 40%.

Market pressures from growing strain in US–China tech relations

Applied Materials’ share price reaction on November 14 reflected market sentiments, as investors reassessed the semiconductor sector’s exposure to escalating US–China tensions. 

Applied Materials forecasts a revenue of $6.85 billion for the current quarter. However, analysts expect an average revenue of about $6.76 billion. They also note that companies with DEEP ties to China’s chip ecosystem face heightened financial and operational risks as the US tightens restrictions blocking critical equipment shipments. 

Applied Materials appears to be the most impacted, with the CEO, Gary Dickerson, saying that foreign competitors have taken their share of the Chinese markets “Non-U.S. equipment companies don’t have the same restrictions, and so restricted customers can buy from those companies, even if they WOULD rather buy from Applied.”

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