What Happened?

A number of stocks fell in the afternoon session after uncertainty increased over when key companies can resume large-scale sales of high-end artificial-intelligence chips to China. 

The U.S. government reportedly extended its review of export license applications for AI hardware, such as Nvidia's H200 chips, on national security grounds. This delay created uncertainty for chipmakers and reportedly led some Chinese customers to postpone orders until clearer guidance was issued. While there were earlier signals that some shipments could restart, the extended review process stalled progress, weighing on the stock of major exporters who saw China as a significant market. The situation highlighted the ongoing geopolitical tensions impacting the semiconductor industry's global supply chain.

The stock market overreacts to news, and big price drops can present good opportunities to buy high-quality stocks.

Among others, the following stocks were impacted:

• Semiconductor Manufacturing company Photronics (NASDAQ: PLAB) fell 2.9%. Is now the time to buy Photronics? Access our full analysis report here, it’s free.
• Semiconductor Manufacturing company Nova (NASDAQ: NVMI) fell 5.7%. Is now the time to buy Nova? Access our full analysis report here, it’s free.
• Semiconductor Manufacturing company FormFactor (NASDAQ: FORM) fell 2.9%. Is now the time to buy FormFactor? Access our full analysis report here, it’s free.
• Semiconductor Manufacturing company Amkor (NASDAQ: AMKR) fell 4.3%. Is now the time to buy Amkor? Access our full analysis report here, it’s free.
• Semiconductor Manufacturing company Applied Materials (NASDAQ: AMAT) fell 6.5%. Is now the time to buy Applied Materials? Access our full analysis report here, it’s free.

Zooming In On Applied Materials (AMAT)

Applied Materials’s shares are quite volatile and have had 19 moves greater than 5% over the last year. In that context, today’s move indicates the market considers this news meaningful but not something that would fundamentally change its perception of the business.

The previous big move we wrote about was 20 days ago when the stock gained 8.2% on the news that Taiwan Semiconductor Manufacturing Co. (TSMC), a major customer, announced a significant increase in capital spending plans and a robust revenue growth forecast for 2026, lifting the entire chip equipment sector. The positive forecast from the world's largest chip manufacturer signaled strong demand ahead. This directly benefited equipment suppliers like Applied Materials, which provides the tools needed for chip production. The optimism spread to Wall Street, where analysts reacted positively. An analyst from Stifel maintained a 'Buy' rating on the stock and increased the price target substantially to $340 from $250. Additionally, RBC Capital set a new price target of $385 for Applied Materials, reflecting increased confidence in the company's prospects.

Applied Materials is up 10.8% since the beginning of the year, but at $297.80 per share, it is still trading 12.8% below its 52-week high of $341.34 from January 2026. Investors who bought $1,000 worth of Applied Materials’s shares 5 years ago would now be looking at an investment worth $2,885.

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