Applied Materials Inc (NASDAQ:AMAT) stock fell 13.36% (As on August 15, 11:22:57 AM UTC-4, Source: Google Finance) after the company beat Wall Street’s targets for its fiscal third quarter but badly missed with its outlook. The Trump administration’s tariffs could double the price of imported chips unless companies buying them commit to building in the U.S. Applied Materials makes tools for chip foundries to physically make chips, much of which currently happens in Asia. Applied Materials said that it has a large backlog of pending export license applications with the U.S. government, but that it’s assuming none of them will be issued in the next quarter. Applied Materials reported $1.78 billion in net income, or $2.22 per diluted share in the quarter, versus $1.71 billion or $2.05 in the year-ago period. The company’s most important division, semiconductor systems, reported $5.43 billion in sales, topping estimates, and representing a 10% rise from last year.

Meanwhile, the company is excited to be a partner in Apple’s American manufacturing program initiative that is designed to strengthen the end to end silicon supply chain in The US. As part of this endeavor, AMAT plans to invest more than $200,000,000 in Arizona to establish a state of the art facility for manufacturing specialized components for the equipment. This builds on the more than $400,000,000 the company have invested in the US manufacturing infrastructure over the past five years to provide the needed capacity and agility to support growing customer demand. Globally, the company is now tracking more than 100 new fabs or major fab expansion projects, an increase of about 10% in the past year.

AMAT in the third quarter of FY25 has reported the adjusted earnings per share of $2.48, beating the analysts’ estimates for the adjusted earnings per share of $2.36, according to LSEG consensus estimates. The company had reported the adjusted revenue growth of 8 percent to $7.3 billion in the third quarter of FY25, beating the analysts’ estimates for revenue of $7.22 billion.

Applied Materials said it expects $2.11 per share in adjusted earnings in the current quarter, lower than LSEG estimates of $2.39 per share. The company said to expect $6.7 billion in revenue, versus $7.34 billion estimated. The company expects a drop in fiscal Q4 revenue because of digestion of capacity in China and nonlinear demand from leading-edge customers given market concentration and fab timing. The company is currently operating in a dynamic macroeconomic and policy environment, which is creating increased uncertainty and lower visibility in the near term, including for the China business.