On August 14, Applied Materials declined 5.27% in regular trading, trading at $514.77/share, with turnover of $805 million.

The decline follows the company's fiscal Q3 earnings release, which beat estimates on all fronts but triggered a classic sell-the-news reaction given the stock had already more than doubled year-to-date. Q3 adjusted EPS came in at $3.50, up 41% year-over-year and above the $3.42 consensus estimate. Revenue rose 25% to $9.12 billion, surpassing the $9.0 billion expectation. Semiconductor Systems sales grew 30% to $7.04 billion, while record gross margins of 50.4% were achieved.

The company issued Q4 guidance with revenue midpoint of $10.25 billion, well above the $9.55 billion Street estimate, and adjusted EPS of $3.82-$4.22. Management noted unprecedented AI-driven demand and raised its full-year semiconductor systems outlook. Despite these strong results, multiple analysts noted that investor expectations had reached extremely elevated levels following the stock's 108% rally, resulting in profit-taking pressure.

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