Why is Applied Materials stock plunging today?

Applied Materials stock plunged 11.7% in morning trading today, reaching $326.29, as a sweeping Democratic victory in the U.S. midterm elections ignited a sharp investor rotation out of semiconductor and AI-linked equities on fears that the new Congressional majority could bring tighter regulation of the artificial intelligence industry and potentially more aggressive export controls on chip technology. A post-election slide in chipmakers snowballed, dragging the Nasdaq 100 sharply lower, as investors bailed from the sector on speculation the Democratic sweep in Congress will usher in a new era of regulation for the artificial-intelligence industry.

The selloff was further fueled by company-specific and sector-level headwinds. Qualcomm dropped sharply in premarket trading after the chipmaker fell short of Wall Street estimates for fourth-quarter smartphone chip sales on sluggish demand and declining Apple-related revenue, amplifying the broader chip-equipment rout. Adding to the pressure, Morgan Stanley had already lowered its price target on Applied Materials from $563 to $538 just two days prior, maintaining an Equal Weight rating, a move that had been weighing on sentiment heading into today’s session. Applied Materials faces its November 12 earnings report after semiconductor-equipment shares fell sharply during October and early November, with China demand, export controls, valuation, and execution remaining key risks.

The macro and sector backdrop amplified the damage. An exchange-traded fund tracking U.S.-listed semiconductor stocks dropped more than 7%, extending losses from the prior session. The Nasdaq Composite fell sharply as investors rotated away from semiconductor and artificial-intelligence shares, with election-related repositioning, chip-sector guidance concerns, and upcoming labor data dominating trading. Applied Materials stock had already fallen more than 30% from its early-October peak heading into today’s session, leaving it technically vulnerable to further selling.

The confluence of post-election regulatory fears, a sector-wide Qualcomm-driven shock, a lingering Morgan Stanley price target reduction, and pre-earnings caution ahead of the November 12 fiscal Q4 report collectively drove Applied Materials well below its open of $348.06, with the stock hitting a session low of $324.46. Applied Materials stock fell sharply on Thursday, November 5, as investors looked ahead to the company’s fiscal fourth-quarter and full-year 2026 results, making the upcoming earnings release the next critical test of whether the extended correction has run its course.