Core Viewpoint - Applied Materials (AMAT) shares experienced a significant decline of 12.71% following conservative guidance for the fourth quarter despite beating expectations in the fiscal third quarter [1][2]. Financial Performance - In the fiscal third quarter, Applied Materials reported revenue of $7.30 billion, an 8% increase year-over-year, and adjusted earnings of $2.48 per share, both exceeding consensus estimates [1]. - The gross margin reached 48.8%, with all three business segments surpassing forecasts [1]. Fourth Quarter Guidance - Management provided a conservative outlook for the fourth quarter, forecasting revenue of approximately $6.70 billion, which is below analysts' average estimate of $7.33 billion [2]. - Adjusted EPS is expected to be $2.11, missing the consensus of $2.39 [2]. Analyst Reactions - The cautious outlook led to multiple analyst downgrades, with Bank of America lowering its rating to Neutral from Buy and reducing the price target to $180, citing weak visibility around demand and pressures related to China [3]. - Summit Insights downgraded the stock to Hold from Buy, highlighting risks from U.S. export restrictions affecting orders in China, potentially leading to excess capacity [3]. - Stifel maintained a Buy rating but cut its price target to $180 from $195, indicating that while long-term fundamentals are sound, near-term guidance necessitates a more conservative valuation [4]. - Goldman Sachs reaffirmed a Buy rating with a target of $215, emphasizing that despite a soft near-term outlook, Applied Materials benefits from strong fundamentals and positioning in etch and deposition technologies [5]. - Barclays also maintained an Equal Weight rating with a target of $170 [5].