Shares of Applied Materials rose 2.5% to close at $330.57 in Monday's after-hours session, building momentum ahead of the company's fiscal first-quarter earnings report scheduled for Thursday. The stock traded between $315.70 and $332.35 during the regular session, shifting investor focus from recent market volatility to the upcoming financial release.
Earnings Expectations and Sector Movement
Analysts project quarterly revenue of $6.89 billion and adjusted earnings of $2.19 per share, according to Zacks Investment Research. These figures align closely with the company's own guidance range. The broader semiconductor sector also saw positive movement, with the VanEck Semiconductor ETF gaining 1.2%. Notable gainers included Nvidia, up 2.4%, and Advanced Micro Devices, which climbed 3.6%.
China Export Controls and Future Guidance
A significant concern for investors remains the impact of U.S. export restrictions on Applied Materials' business in China. The company previously indicated that equipment spending in China is expected to decline in 2026 due to these controls, though it anticipates stronger overall revenue in the second half of that year. Management has noted that foreign competitors face fewer restrictions in the Chinese market.
Thursday's earnings conference call is expected to provide crucial updates on shipment timelines to China, licensing uncertainties, and the overall demand environment for chipmaking tools. Memory demand, particularly for DRAM used in servers, and advanced packaging technologies are key factors driving equipment investment.
While current sentiment appears positive, the company faces potential headwinds from any cautious outlook, delays in customer spending, or additional export limitations. The stock's performance remains sensitive to sector trends and guidance revisions.
The next major catalyst will be Thursday's results and management commentary, offering fresh data points on 2026 demand drivers and the company's strategic positioning amid evolving trade policies.
