Applied Materials Analysts Flag $600 Million Guidance Shortfall, China Slowdown

Core Viewpoint - Applied Materials Inc. reported strong fiscal third-quarter results but experienced a significant decline in share price, indicating market concerns despite positive earnings [1] Group 1: Analyst Ratings and Price Targets - BofA Securities downgraded Applied Materials from Buy to Neutral, reducing the price target from $190 to $180 due to high exposure to over-supplied mature nodes, particularly in China [2] - Goldman Sachs maintained a Buy rating but cut the price target from $225 to $215, citing weak guidance primarily due to declining equipment spending in China [4] - Needham kept a Buy rating with a price target of $250, noting that the revenue outlook for October was significantly below consensus estimates, marking a substantial guidance miss [6] Group 2: Revenue Guidance and Market Conditions - Applied Materials projected a sequential revenue decline of approximately $700 million, with a $500 million drop in China revenue and a $500 million shortfall in Gate-All-Around (GAA) revenue [7] - The company guided for revenue of $6.70 billion and non-GAAP earnings of $2.11 per share, both below consensus estimates of $7.30 billion and $2.37 per share, respectively [5] - Analysts expressed concerns about the company's growth prospects due to high customer concentration and nonlinear demand trends, particularly in the context of leading-edge logic [3][5] Group 3: Market Reaction - Shares of Applied Materials fell by 13.26% to $163.27 following the earnings report and guidance announcement [8]