TLDR
- AMAT stock sinks as U.S. export rules threaten $600M revenue hit in FY2026
- Applied Materials warns BIS export curbs may cut deep into China operations
- Export rules slash AMAT’s outlook: $110M Q4 hit, $600M in FY2026 revenue loss
- AMAT slides after-hours on new BIS restrictions targeting China affiliates
- Stricter U.S. export curbs widen, AMAT warns of major sales impact in 2026
Applied Materials (AMAT) stock closed Thursday at $223.59, up 2.69%, but quickly reversed course in after-hours trading. The stock dropped 3.46% to $215.85 after the company flagged significant revenue headwinds tied to new export regulations.
Applied Materials (AMAT) stock
AMAT expects the tightened U.S. export restrictions will slash fiscal 2026 revenue by $600 million.
Revenue Hit Tied to BIS Rule Pushes AMAT Lower
Applied Materials responded to new export rules announced by the Bureau of Industry and Security (BIS) on September 29, 2025. The BIS rule now applies restrictions to foreign affiliates majority-owned or controlled by entities on the U.S. Entity List. As a result, AMAT projects a $110 million hit to its Q4 FY2025 revenue and a $600 million impact in FY2026.
The company confirmed these financial projections in a Form 8-K filing, which it furnished rather than filed under regulatory requirements. Applied Materials stated the new rules restrict its ability to export specific semiconductor manufacturing products and services. These restrictions target certain China-based customers, now requiring a U.S. export license.
Previously, AMAT could continue exports if the customers were not explicitly named on the BIS Entity List. However, the new BIS Affiliates Rule broadens the scope to include firms with significant ownership ties to listed entities. This closes a key exemption that previously allowed some export activity despite indirect links.
Stricter Ownership Rules Expand Export Limits
Under the updated rule, any company at least 50% owned by an Entity List company now falls under the same export restrictions. Even minority ownership can trigger additional compliance checks, increasing the complexity of business transactions. AMAT acknowledged that this change severely restricts its ability to serve some of its clients based in China.
The firm did not reveal which customers or product lines would be most affected, leaving market analysts to speculate.The projected revenue shortfall suggests a substantial impact across its China operations. As Applied Materials processes the regulatory shift, it will likely evaluate operational alternatives and supply chain adjustments.
Applied Materials has extensive exposure in Asia, particularly in the semiconductor equipment supply chain. This reliance on export markets makes the company more vulnerable to shifts in U.S. policy. The BIS rule directly targets that exposure, disrupting existing customer relationships and long-term revenue planning.
