Shares cratered as Applied Materials, the world's largest seller of chipmaking equipment, held a much-anticipated investor day on October 13 and declined to issue a forecast for industry-wide spending on wafer-fabrication equipment (WFE) — the factory machines that every chipmaker must buy to build or upgrade a plant. The stock fell roughly 7% intraday, marking its sixth straight losing session and leaving it ~36% below its record close of $723 set in June.
The Missing Number That Spooked the Market
CEO Gary Dickerson told attendees plainly: "We're not going to give a specific WFE forecast today."
He pointed to variables including available factory space, supply-chain bottlenecks, and energy-infrastructure financing as factors clouding near-term visibility.
Analysts had warned in advance that "a firm growth figure for 2027 tool sales would ease this worry, and no figure would keep it open." That is exactly what happened: without a concrete demand benchmark, a stock trading at ~39–40× forward earnings had no room for ambiguity.
Plenty of Long-Term Promises, but Investors Wanted Near-Term Proof
Management rolled out ambitious 2030 targets — gaining more than two percentage points of WFE market share, hitting ~54% gross margins (up from 48.8% in 2025), ~40% operating margins, and growing service revenue past $12 billion. Yet concerns surfaced that Applied's WFE market share actually fell from 20.0% in 2024 to 17.9% in 2025 , undermining the share-gain story before it starts. Promises of future dominance ring hollow when the trend line is moving the wrong way.
China's CXMT Added a Sector-Wide Headwind
CXMT's global DRAM market share rose to about 10% , and the Chinese chipmaker announced "key progress" on a denser next-generation memory-cell design, with a server-memory product planned by year-end. That rattled every equipment and memory name: peers Lam Research fell 3.5%, KLA 3.4%, and ASML 2.6%. For Applied, whose DRAM-related tools are a highlighted growth pillar, a rising Chinese competitor complicates both the demand outlook and the export-control risk calculus.
Wall Street Is Split on What Comes Next
Cantor Fitzgerald reiterated an Overweight rating with an $850 target, implying roughly 85% upside , while the company has posted five consecutive earnings beats even as the stock has fallen ~22% in three months. The disconnect means either the selloff is a compelling entry point — or the market is pricing in a 2027 that management itself won't yet quantify.