Applied Materials: Navigating Geopolitical Tensions in the AI Chip Race

The semiconductor equipment giant Applied Materials finds itself at the heart of an escalating geopolitical struggle. As U.S. lawmakers prepare additional restrictions on technology transfers to China, the company strives to maintain its growth trajectory in the artificial intelligence era. Can Applied Materials preserve its leadership position despite regulatory challenges and recent earnings disappointments?

Applied Materials reported record full-year revenue for fiscal 2025, reaching $28.37 billion—a 4% increase over the previous year. However, this headline figure conceals emerging weaknesses. Fourth-quarter sales declined by 3%, while annual profits contracted by 2%.

The company did surpass analyst expectations for adjusted earnings per share, which came in at $2.17. This provided some consolation following August’s Read more...