Applied Materials shares fall amid missing WFE guidance and inflation fears

Applied Materials shares have faced downward pressure due to a combination of missing short-term guidance and broader macroeconomic concerns. During an investor day in San Francisco, management declined to provide a specific near-term outlook for wafer fab equipment (WFE) spending, citing uncertainties that could slow the semiconductor industry's expansion pace, such as limited cleanroom space.

Additionally, the stock was impacted by higher-than-expected US inflation data, which sparked fears of sustained high interest rates. Investors are concerned that increased financing costs could dampen capital expenditures for data centers and artificial intelligence infrastructure. In response to market uncertainty, Evercore ISI lowered its price target for Applied Materials from $700 to $590, while maintaining an ‘Outperform’ rating.

Despite recent volatility, the company has maintained ambitious long-term objectives. Applied Materials aims to achieve a non-GAAP gross margin of approximately 54 percent and a non-GAAP operating margin of about 40 percent by 2030.