The Motley Foolยท2025-08-15 18:10Core Viewpoint - Applied Materials' warning about declining revenue and profits in Q4 2025 has negatively impacted Lam Research's stock performance, raising concerns among investors about potential similar outcomes for Lam [1][4][6] Group 1: Applied Materials Performance - Applied Materials reported Q3 fiscal 2025 earnings of $2.48 per share on sales of $7.3 billion, exceeding analyst expectations of $2.36 per share and $7.2 billion in sales [3] - However, the company projected Q4 profits to drop to approximately $2.11 per share, below Wall Street's forecast of $2.38 per share [4] - Q4 revenue is expected to decline to $6.7 billion, an 8% decrease compared to Wall Street expectations, attributed to "digestion of capacity in China" and "non-linear demand from leading-edge customers" [5][6] Group 2: Impact on Lam Research - Lam Research's stock fell by 6.9% following Applied Materials' announcement, reflecting investor concerns about the semiconductor equipment market [1][6] - The current valuation of Lam Research at 26 times earnings raises questions about its attractiveness as an investment, suggesting it may be time for investors to consider selling [6]