Dec. 21, 2025 — Applied Materials, Inc. (NASDAQ: AMAT) enters a holiday-shortened trading week with its stock hovering near recent highs. Investors are grappling with two key influences: the surging demand for AI-driven wafer-fab equipment and the persistent uncertainties surrounding U.S.-China export controls. As of Friday, AMAT’s shares last traded at $256.41, setting the stage for a week characterized by potentially thin liquidity and heightened volatility in response to macroeconomic headlines. This environment may lead semiconductor-equipment stocks to be more sensitive to overall market sentiment than to specific company developments.
As AMAT approaches the week, its performance remains robust. The stock rose 1.15% on the last trading day, outperforming broader market benchmarks over the past month. The stock is currently close to its 52-week high, near the mid-$270s, a range that typically attracts both momentum investors and those looking to lock in profits as the year draws to a close. In a shortened trading week, price points near these highs can amplify market reactions to minor news events.
The upcoming trading week is marked by a non-standard schedule for U.S. markets, with an early closure on Wednesday, Dec. 24, at 1:00 p.m. ET and closures on Thursday, Dec. 25, for Christmas. The markets will reopen for a full session on Friday, Dec. 26. This condensed schedule often leads to reduced trading volumes, which can amplify individual stock movements, making it vital for traders to stay alert to both technical levels and macroeconomic developments.
The current demand landscape remains favorable for Applied Materials, bolstered by expectations of continued growth in AI-driven capacity expansion. According to industry group SEMI, chipmaking equipment sales are projected to rise by about 9% to $126 billion in 2026, with further increases anticipated in 2027 as both logic and memory capacities are expanded to cater to AI workloads. Investors view AMAT as one of the leading suppliers poised to benefit from this trend, particularly within the advanced logic and DRAM sectors.
On the financial front, Applied Materials recently reported record fiscal 2025 revenue of $28.37 billion, marking a 4% year-over-year increase, while also achieving record earnings per share. The earnings call highlighted revenue growth across various segments, although the company acknowledged the impact of trade restrictions affecting access to the Chinese market. The company’s revenue from foundry systems and DRAM sales outside China reached unprecedented levels, and its non-GAAP gross margin hit 48.8%, the highest in 25 years.
However, the ongoing export controls related to China continue to pose significant risks for AMAT. Recently, the company projected a $600 million revenue hit for fiscal 2026 due to expanded restrictions, compounded by a $110 million impact from a prior quarter. Analysts have noted that AMAT’s revenue derived from China has declined to the mid-20% range from nearly 40% in previous years, reflecting the tightening competitive landscape as non-U.S. rivals face different regulatory challenges.
Despite these headwinds, the company is actively working to reshape its cost base, having announced layoffs affecting about 4% of its workforce in October. This move is part of a broader effort to streamline operations in light of ongoing policy-related uncertainties. On the shareholder returns front, AMAT declared a quarterly cash dividend of $0.46 per share, with nearly $6.3 billion returned in fiscal 2025 through dividends and repurchases, underscoring its commitment to shareholder value.
Analyst sentiment heading into the week remains bullish, with a consensus rating of “Buy,” albeit with price targets varying widely. The average target stands at $236.85, suggesting that while analysts favor the company’s long-term prospects, there is considerable disagreement on how to factor in the potential impact of AI demand against the backdrop of regulatory challenges. Recent upgrades from firms such as B. Riley and Jefferies reflect increasing optimism regarding AMAT’s growth trajectory.
Looking ahead, the week of Dec. 22–26, 2025, will likely see Applied Materials’ stock driven more by market sentiment and headlines than by traditional earnings narratives. While the structural demand for AI-related technologies remains strong, the fluctuating nature of export restrictions and macroeconomic indicators will be pivotal in shaping investor sentiment. Traders should watch for key technical levels and upcoming economic data releases closely as they navigate this complex landscape.
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