Applied Materials (AMAT) Stock Falls as US-China AI Tensions Escalate

TLDR

• AMAT dropped 2.9% to $404.86 on Monday despite beating Q1 earnings estimates
• US-China AI tensions intensified after China blocked Meta’s $2B acquisition of AI startup Manus
• The White House accused China of stealing American AI technology at an “industrial scale”
• Supply chain concerns tied to US-Israel-Iran conflict added further pressure
• AMAT is still up 50.2% year-to-date and trading near its 52-week high of $417.04

Applied Materials (AMAT) fell 2.9% on Monday to $404.86, giving back some of its recent gains as geopolitical tension between the US and China ratcheted up around artificial intelligence.

Applied Materials, Inc., AMAT

The drop came despite the company posting a strong Q1 beat. AMAT reported earnings per share of $2.38, topping the $2.21 consensus estimate. Revenue came in at $7.01 billion, above the $6.88 billion expected.

The sell-off had little to do with AMAT’s fundamentals and more to do with the macro backdrop.

China ordered Meta to unwind its $2 billion acquisition of AI startup Manus, citing national security concerns. The move signaled a sharper posture from Beijing on limiting foreign access to its tech sector.

The White House responded by accusing China of stealing American AI technology on an “industrial scale” and warned of stricter enforcement to come. That kind of rhetoric tends to unsettle investors in semiconductor equipment — a sector that sits squarely at the center of the US-China tech dispute.

Separately, ongoing supply chain disruptions tied to the US-Israel-Iran conflict added to the pressure. Higher raw material costs and the risk of production delays weighed on sentiment across tech hardware names.

AMAT has had 21 moves greater than 5% over the past year, so Monday’s decline fits within its normal volatility range. The market is treating this as meaningful news, but not a fundamental shift in the company’s outlook.

Analyst Targets Remain Elevated

Wall Street hasn’t flinched. KeyCorp, Barclays, and TD Cowen all raised their price targets to $450 following the Q1 report in February. Needham lifted its target to $440. Zacks upgraded the stock to a Strong Buy.

The current consensus sits at Moderate Buy, with 27 Buy ratings and 6 Hold ratings. The average price target is $368.29 — below where the stock is currently trading.

For Q2, AMAT has guided for earnings per share of $2.44 to $2.84. Analysts expect full-year EPS of $11.10.

The company also raised its quarterly dividend to $0.53, up from $0.46 — an annualized rate of $2.12 and a yield of around 0.5%. The next payment is scheduled for June 11.

Institutional Investors Stay In

Institutional ownership climbed to 80.56%. Vanguard added to its position in Q4, as did Capital Research Global Investors, which boosted its stake by nearly 120%. Morgan Stanley and Ameriprise also increased their holdings.

On the insider side, CAO Adam Sanders and Director Judy Bruner sold a combined total worth roughly $4.48 million last quarter. Insiders collectively own 0.30% of the company.

Just three days before Monday’s drop, AMAT gained 3.7% after strong Intel earnings lifted the broader semiconductor sector. Intel reported 22% growth in its data center business, and the rally spread to AMD, Qualcomm, and ARM.

AMAT is up 50.2% so far in 2026 and recently hit a 52-week high of $417.04.

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