Markets
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Luke Kawa

Applied Materials dips despite posting modest beats on Q4 sales, EPS as restrictions on sales to China weigh on performance

Solid Q4 results and a slightly better-than-anticipated outlook from Applied Materials still aren’t inspiring investors in premarket trading, with the stock down 4.8% as of 4:40 a.m. ET.

For the three months ended October 26, the firm reported:

  • Revenue: $6.8 billion (compared to analyst estimates of $6.67 billion and guidance for $6.2 billion to $7.2 billion)

  • Adjusted earnings per share: $2.17 (estimate: $2.11, guidance: $1.91 to $2.21)

Q1 guidance was also modestly ahead of estimates, as management pointed to sales of about $6.85 billion (plus or minus $500 million) with adjusted earnings per share of $2.18 (plus or minus $0.05). The consensus estimates for these figures were $6.81 billion and $2.15, respectively.

The company is preparing to meet a bigger pickup in demand by the middle of next year.

“Based on our conversations with our customers and partners, we are preparing Applied’s operations and service organizations to be ready to support higher demand beginning in the second half of calendar 2026,” Chief Financial Officer Brice Hill said.

Applied Materials was up more than 35% year to date heading into this report. That being said, it’s thoroughly lagged peers KLA Corp and Lam Research in the semi wafer fab equipment space, with the bulk of that underperformance coming after its Q3 earnings report in mid-August included underwhelming guidance for these Q4 results.

The entire space has come under scrutiny for its business with China, but Applied Materials has had the worst go of it: in early October, management flagged a $600 million hit to fiscal 2026 sales because of export restrictions.

“In 2026, we expect wafer fab equipment spending in China to be lower, and we are not anticipating significant changes to market restrictions,” CEO Gary Dickerson said on the conference call following earnings, noting that the share of China’s wafer fab equipment market the firm couldn’t sell to rose to “well over 20%” in late 2024 and early 2025 due to export restrictions, up from 10% early last year.

Needham analyst Charles Shi flagged how export restrictions shifted Applied Materials’ ability to meet demand from other customers, which helped Q4 sales while hurting its Q1 outlook:

“We believe the stock was down in after hours as the buy side bogey for F1Q26 was as high as $7.1B, partially due to buy side viewing the $110MM China revenue in F4Q25 and some of the $600MM China revenue in FY26, which were thought to be lost due to recent BIS 50% affiliate rule, should be added back as the US later suspended the rule for one year. Management clarified that some ex-China revenue were pulled into October when the BIS rule was first announced in late September, and it is the reason why AMAT actually beat the original F4Q25 guidance (which it gets no credit for), and AMAT did not guide a higher number for F1Q26 (which ends up hurting the stock).”

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Tasha Matsumoto
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Stocks continue slide as US oil settles above $100

Stocks fell, weighed down by tech, as the US-Iran war entered its fifth week.

Brown bear on a rock
markets
Matt Phillips & Luke Kawa

Memory, optical, and AI-construction stocks dive as embattled SaaS stocks rebound

Memory stocks sank on Monday, continuing a sell-off that began last week with new details about a potentially more memory-efficient AI algorithm from Google Research.

Western Digital, Micron, Seagate Technology Holdings, and retail favorite Sandisk all tumbled.

Industry publication Wccftech flagged that some memory chip prices have seen a “significant drop” recently across multiple US retailers.

A new, upbeat initiation for Seagate by JPMorgan analysts — they rated it “overweight,” basically a buy, on “opportunity for significant upside” — couldn’t help Seagate shake off the slump in the broader data center trade.

Optical stocks — recent high-flyers — also got slammed, taking down Applied Optoelectronics, Corning, Lumentum, Coherent, and Ciena Corp. . The group may also under particular pressure in light of reports that Samsung is entering the silicon photonics market.

AI construction trades like Emcor, Vertiv Holdings, and Sterling Infrastructure also sank.

Meanwhile, traders seemed to be scurrying back to securely profitable software-as-a-service (SaaS) and cybersecurity stocks as a place to wait out the market mayhem.

ServiceNow, Zscaler, CrowdStrike, Salesforce, and Atlassian were all solidly in the green in midday training.

markets
Luke Kawa

Meta rallies after being named a “top pick” by Morgan Stanley

Meta is off to a strong start to the week after being named a new “top pick” of Morgan Stanley’s internet analysts.

Their case: the social media giant is cheap and commands an ever-increasing amount of eyeballs, which it’ll leverage to make money from its massive AI capex through nascent opportunities like agentic shopping and assistants.

“META sentiment has troughed due to GenAI ROIC and long-term positioning fears, and more recently macro ad market and regulatory question marks,” wrote analyst Brian Nowak. “In all, META now trades at ~15X our ’27 $36 EPS, 1 standard deviation below the long-term average, which creates a strong buying opportunity, in our view.”

Reported job cuts would also be “a bullish development” that boosts earnings, he added.

Even so, Nowak trimmed his price target on the stock to $775 from $825, which still represents upside of about 50%.

The hyperscalers have come under persistent pressure as investors remain reticent to bet that this capex binge will have a happy ending. Per The New York Times, Meta recently delayed the launch of its new model because of performance issues.

(That being said, the company’s latest earnings report did show that its ability to use AI tools to grow its top line remains impressive, even if its models aren’t best in class.)

markets
Matt Phillips

American aluminum stocks rip following strikes against Gulf’s giant smelters

Aluminum stocks soared Monday after Iran attacked major smelting operations in the Gulf region over the weekend.

Alcoa and Century Aluminum both surged Monday, after strikes Saturday hit aluminum plants in Bahrain and the United Arab Emirates. New York aluminum futures were up about 4% shortly after 11 a.m. ET.

Bloomberg reports that the Gulf is the source of roughly 9% of the world’s aluminum supply, which was already imperiled by the closure of the Strait of Hormuz.

Iran’s Revolutionary Guard Corps said the combined drone and missile attacks on the plants were justified by the aluminum producers’ links to the US military and aerospace industries in the region.

Producing aluminum is highly energy-intensive, and the Gulf has emerged as a center of the industry in recent years due to its energy assets. Emirates Global Aluminum, for example, is one of the world’s largest producers of the lightweight metal.

The attacks on the plants only add to the upward pressure on prices, as it can take months to restart closed smelters.

Emirates Global Aluminium Says Smelter Site Damaged in Attack

Emirates Global Aluminium Says Smelter Site Damaged in Attack

Bloomberg reports that the Gulf is the source of roughly 9% of the world’s aluminum supply, which was already imperiled by the closure of the Strait of Hormuz.

Iran’s Revolutionary Guard Corps said the combined drone and missile attacks on the plants were justified by the aluminum producers’ links to the US military and aerospace industries in the region.

Producing aluminum is highly energy-intensive, and the Gulf has emerged as a center of the industry in recent years due to its energy assets. Emirates Global Aluminum, for example, is one of the world’s largest producers of the lightweight metal.

The attacks on the plants only add to the upward pressure on prices, as it can take months to restart closed smelters.

markets
Matt Phillips

British government weighs removing Palantir from NHS data systems

Officials in the British government are exploring ways to eject defense, intelligence, and AI software company Palantir Technologies from data systems used by the National Health Service, the government-funded health system.

The Financial Times reports:

“The US company was awarded a seven-year £330mn contract in 2023 to create a data platform that collates health waiting lists, patient information and other sensitive data.

Its role has become an increasing source of controversy, given its ties to the US defence sector and its co-founder and CEO Alex Karp’s vocal support for Donald Trump’s immigration crackdown. MPs, NHS staff and medical trade unions have voiced concerns about Palantir’s suitability for managing data in national health systems.”

While Palantir’s AI software services business — aimed at corporate customers — is a fast-growing business line, the US government remains Palantir’s single largest source of revenue, accounting for $1.9 billion in sales in 2025. That’s almost as much as Palantir’s entire commercial division, which logged $2.1 billion in revenue in 2025.

But the company’s close ties to the US government — including providing services to US agencies such as Immigration and Customs Enforcement amid the Trump administration’s mass deportation program, as well as US intelligence and military services — have created resistance to growth in some other areas.

For instance, Switzerland repeatedly rejected Palantir systems, according to recent reporting from Swiss magazine Republik, after officials there raised concerns about data sovereignty and risks data could be accessed by the US government and intelligence services.

Ministers explore triggering break clause in Palantir’s NHS contract

Ministers explore triggering break clause in Palantir’s NHS contract

“The US company was awarded a seven-year £330mn contract in 2023 to create a data platform that collates health waiting lists, patient information and other sensitive data.

Its role has become an increasing source of controversy, given its ties to the US defence sector and its co-founder and CEO Alex Karp’s vocal support for Donald Trump’s immigration crackdown. MPs, NHS staff and medical trade unions have voiced concerns about Palantir’s suitability for managing data in national health systems.”

While Palantir’s AI software services business — aimed at corporate customers — is a fast-growing business line, the US government remains Palantir’s single largest source of revenue, accounting for $1.9 billion in sales in 2025. That’s almost as much as Palantir’s entire commercial division, which logged $2.1 billion in revenue in 2025.

But the company’s close ties to the US government — including providing services to US agencies such as Immigration and Customs Enforcement amid the Trump administration’s mass deportation program, as well as US intelligence and military services — have created resistance to growth in some other areas.

For instance, Switzerland repeatedly rejected Palantir systems, according to recent reporting from Swiss magazine Republik, after officials there raised concerns about data sovereignty and risks data could be accessed by the US government and intelligence services.

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