Applied Materials slumps after forecasting $600 million fiscal 2026 revenue hit from export curbs

Applied Materials is down 3% in early trading after the semiconductor machinery maker said revenues could take a $600 million hit in the next fiscal year, on the back of widening chip export restrictions.

Per the company’s regulatory filling, net revenue for the fourth quarter of 2025 will take a $110 million dent, while annual sales next year would be reduced by “approximately $600 million.” Applied Material’s fiscal 2026 runs through next October.

In a move to restrict the development of China’s domestic chip industry, the Commerce Department started to prevent sanctioned companies from using affiliates to access restricted US goods. On Monday, the blacklist was widened to include majority-owned subsidiaries of listed companies.

“We doubt AMAT will be the only US semicap player impacted here,” Bernstein analyst Stacy Rasgon cautioned, while noting that other players in the industry have not offered any commentary on this subject.

China is the top market for Applied Materials and others in the wafer fab equipment industry.

In its most recent quarter, 35% of AMAT’s net revenues were generated by sales to China. For peers Lam Research and KLA Corp, those shares stood at 34% and 33%, respectively, for the year ending in June.