Applied Materials Hit by ‘Sell the News’ as Insiders Cash Out $169 Million

The narrative for Applied Materials has turned decidedly mixed. The chip-equipment giant is expanding into a new South Korean hub and booking record sales, yet its stock has been shredded over the past week, with insiders quietly selling a big chunk of their holdings. Investors who rode a 191.6% gain over twelve months are now grappling with a 15.2% weekly decline that deepened to more than 18% across seven trading days, dragging the shares to around €468.85 from their late-June all-time high of €647.80.

The immediate trigger was quintessential “buy the rumor, sell the news.” Samsung Electronics reported a 19-fold surge in second-quarter operating profit—a seemingly positive data point for chip demand—but the market chose to cash out instead of buy more. The same deflationary mood swept across the broader semiconductor-equipment sector, hitting Applied Materials particularly hard because its valuation had soared during the twelve-month run-up. The stock now sits roughly 25% below its 52-week peak, though it is still trading about 10% above its 50-day moving average of €438.59.

That technical weakness masks a fundamentally robust business. Applied Materials doesn’t make chips; it makes the machines that produce them, giving it a near-monopoly chokehold on the industry’s expansion. In the second fiscal quarter of 2026, the company posted record revenue of $7.91 billion, up 11% year-on-year, with adjusted earnings per share of $2.86. Management guided for third-quarter EPS between $3.16 and $3.56, and the wafer-fab-equipment market posted a 14% jump in billings for the first calendar quarter of 2026 — a new sector high.

To meet soaring demand, the company is deepening its physical footprint. It signed a memorandum of understanding with the city of Yongin in South Korea to build a 13,305-square-meter facility inside that city’s fast-growing chip cluster. The move mirrors the presence of peers ASML, Lam Research and Tokyo Electron, all of which are already established in the area. Applied Materials is also advancing its technology portfolio, ramping up coating systems for gate-all-around transistors and acquiring NEXX to strengthen panel-packaging capabilities — both critical for the intricate architectures underpinning next-generation AI chips.

Should investors sell immediately? Or is it worth buying Applied Materials?

But while the long-term story remains intact, insider behaviour has raised eyebrows. Over the past three months, company executives sold shares worth around $169 million. That selling has not deterred most Wall Street analysts. Morgan Stanley lifted its price target to $647 from $502 but kept an “Equal Weight” rating, citing the tension between elevated valuation and a potential earnings peak. Susquehanna holds the highest target on the Street at $900, betting the wafer-fab-equipment market will grow more than 30% in calendar 2026. Goldman Sachs raised its target to $645, sticking with a bullish view on AI-infrastructure spending.

The stock’s annualized volatility remains extreme at roughly 97%, and the relative strength index of 47.5 suggests no clear overbought or oversold signal. For long-term holders, however, the math is about structural growth, not weekly price swings. The global semiconductor market is projected to hit $975 billion this year and double to $2 trillion by 2036. Applied Materials is currently negotiating more than 100 new fab projects worldwide, and the big wave of machine deliveries is expected to begin in earnest from 2027 onward. The company’s own forecast calls for its semiconductor-systems business to grow more than 30% in 2026, while its chip-packaging unit is seen expanding by over 50%.

The question is whether the current sell-off is a healthy correction or the beginning of a deeper rotation out of AI hardware. With insiders cashing out and the sector absorbing profit-taking after a historic rally, the next few weeks — and the reception to both the Yongin expansion and third-quarter earnings — will likely determine whether Applied Materials can regain its momentum or needs to consolidate further.