Applied Materials (AMAT) Is Down 12.4% After Russell Reclassification And AI Tool Launches Has The Bull Case Changed? - simplywall.st

In late June 2026, Applied Materials (AMAT) saw a 12.4% stock drop after being removed from several Russell value-oriented indexes, but was quickly added to the Russell Top 50, signaling a shift in in... Read original →

Applied Materials’ stock dip reflects a valuation reset, not weakening fundamentals. Technologically, its eBeam inspection and DRAM epitaxy tools directly address yield bottlenecks in HBM4 and AI chips, accelerating advanced packaging from optional to essential—forcing Samsung and others to front-load capex. However, tightening U.S. export controls on EUV and terbium-containing materials have compelled AMAT to restructure spare parts logistics across Taiwan, China and mainland China, raising O&M costs by over 15%. Lam Research may exploit this with localized service agility in ICAPS, while KLA could trigger a price war in metrology. Over the next 18 months, if global AI server orders grow below 30%, equipment makers face immediate order cuts. Yet if HBM demand surges, AMAT’s integrated toolset positions it to capture over 60% of premium DRAM equipment growth, cementing its role as the unseen backbone of AI infrastructure.