Applied Materials Inc., the largest US maker of chip-manufacturing equipment, suffered its worst stock decline in a month after giving a disappointing revenue forecast, a sign that some semiconductor customers may be holding off on orders.

Shares of Applied Materials (NASDAQ: AMAT), the nation's biggest manufacturer of semiconductor equipment, dropped today after it offered disappointing guidance in its fourth-quarter earnings report due to weakness in China.

Applied Materials' stock is in free-fall due to weak earnings and guidance. Learn why AMAT stock remains a sell with unimpressive margins and growth.

Applied Materials forecast first-quarter revenue below Wall Street estimates on Thursday, a sign of sluggish demand for the chipmaking equipment outside of AI-powered chips, sending its shares down nearly 5% in extended trading.

During the quarter, Applied Material’s semiconductor systems business unit – by far its biggest – delivered revenue of $5.18 billion, up 6% from a year ago. Sales in the global services segment rose 11%, to $1.64 billion, while revenue from the much smaller display and adjacent markets unit fell 29% to $211 million.

The semiconductor manufacturing equipment specialist reported record revenues in its fiscal 2024 fourth quarter.

Applied Materials forecasts revenue growth of between 8% and 12% across its core semiconductor-systems business and its applied global-services segment, respectively, but also a 28% drop in display revenue due to sales headwinds in China.