Could Expanding US Export Curbs Force AMAT to Rethink Its China Strategy?

• In late September 2025, Applied Materials announced that newly expanded U.S. Department of Commerce export restrictions will further limit its ability to supply certain semiconductor equipment and services to select China-based customers without a license, with the company anticipating a potential revenue impact of about US$710 million for fiscal 2026.
• This development highlights the significance of China to Applied Materials’ business, with the new compliance challenges adding uncertainty to its largest market and potential ramifications for the broader semiconductor equipment industry.
• We'll look at how the heightened export restrictions on China could alter Applied Materials' long-term growth outlook and business risks.

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Applied Materials Investment Narrative Recap

To own shares of Applied Materials, you need to believe in the company’s ability to capitalize on structural growth in AI-driven semiconductor demand and benefit from device advances like high-bandwidth memory and advanced packaging. The newly expanded US export restrictions on equipment sales to China present a material risk to near-term revenue, directly impacting the company’s largest market and representing a significant headwind to the most critical short-term catalyst, capital spending on semiconductor equipment in China.

Among recent announcements, Applied Materials’ newly secured US$2.0 billion revolving credit facility stands out as especially relevant, providing the company with greater liquidity and financial flexibility as it manages uncertainties from export license restrictions and potential revenue volatility. With proceeds earmarked for general corporate purposes, including possible responses to shifting geopolitical and operational conditions, the facility could help buffer some of the challenges arising from tightened US-China trade rules.

However, investors should also be aware that ongoing changes to export policies may not only affect short-term sales but could redefine revenue visibility and risk exposure for the years ahead if regional demand remains uncertain...

Read the full narrative on Applied Materials (it's free!)

Applied Materials' outlook forecasts $32.5 billion in revenue and $9.2 billion in earnings by 2028. This is based on a projected annual revenue growth rate of 4.3% and a $2.4 billion increase in earnings from the current $6.8 billion.

Uncover how Applied Materials' forecasts yield a $198.97 fair value, a 9% downside to its current price.

Exploring Other Perspectives

Twenty individual fair value estimates from the Simply Wall St Community span from US$142.35 to US$230.54 per share. This diversity reflects how concerns about export license uncertainties and China’s key role can lead to widely different outlooks for Applied Materials.

Explore 20 other fair value estimates on Applied Materials - why the stock might be worth as much as 6% more than the current price!

Build Your Own Applied Materials Narrative

Disagree with existing narratives? Create your own in under 3 minutes - extraordinary investment returns rarely come from following the herd.

• A great starting point for your Applied Materials research is our analysis highlighting 3 key rewards that could impact your investment decision.
• Our free Applied Materials research report provides a comprehensive fundamental analysis summarized in a single visual - the Snowflake - making it easy to evaluate Applied Materials' overall financial health at a glance.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

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