Semiconductor firm Applied Materials (AMAT) has released its fourth-quarter guidance for Fiscal Year 2025, showing a 4.9% decline in revenue and a 9% drop in adjusted earnings per share compared to the same period last year. This disappointing outlook led to a sharp sell-off, with the stock falling over 14% in Friday’s trading.
Several financial institutions downgraded their ratings in response. Bank of America lowered its rating from Buy to Hold, citing concerns about AMAT’s exposure to oversupplied segments, particularly mature nodes in China and key customers like Intel. Five-star analyst Vivek Arya warned that the company’s concentration in these areas could hurt its performance during this phase of the semiconductor cycle.
Analysts at Summit Insights Group also downgraded AMAT to Hold, citing U.S. export restrictions as a possible cause for Chinese customers to over-order, resulting in excess capacity. However, Needham reaffirmed its Buy rating and kept a bullish price target of $240 per share, citing optimism about DRAM growth.
As of now, analysts have a Moderate Buy consensus rating on AMAT stock based on 19 Buys, eight Holds, and one Sell assigned in the past three months. The average stock price target is $203.21 per share, implying 24.6% upside potential.
Source: https://www.tipranks.com/news/applied-materials-stock-amat-tanks-as-analysts-downgrade-after-weak-guidance