Applied Materials (AMAT) stock dropped about 4% in Thursday’s after-hours trading. The fall came after the semiconductor equipment maker said it expects a major $600 million hit to its 2026 revenue due to new export restrictions imposed by the Bureau of Industry and Security (BIS).
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Following the news, other semiconductor equipment manufacturers, such as Lam Research (LRCX) and KLA Corporation (KLAC), were also down 2.7% and 3%, respectively.
Impact of the New BIS Rule
On September 29, 2025, the U.S. government tightened export controls through a new rule issued by the BIS, known as the BIS Affiliates Rule. The update expands the list of foreign companies, primarily in China, subject to U.S. trade restrictions.
Applied Materials warned that the rule will hinder its ability to export advanced chipmaking equipment and offer services to certain Chinese clients. Without a special license, the company may be blocked from selling key products to those customers.
As a result of this new rule, Applied Materials expects to lose about $110 million in revenue for the fourth quarter. In August, the company had issued Q4 sales guidance of $6.2 billion to $7.2 billion.
The drop in AMAT stock reflects broader tensions in the semiconductor industry, as U.S. regulators tighten controls on technology exports to China amid geopolitical and national security concerns.
What Is the Target Price for AMAT?
Turning to Wall Street, analysts have a Moderate Buy consensus rating on AMAT stock based on 16 Buys, 11 Holds, and one Sell assigned in the past three months. Further, the average AMAT stock price target of $197.80 per share implies 11.53% downside risk.
