Why is Applied Materials stock down today? Support test at $490.45 and downside targets

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Applied Materials drops 4.72% to $509

Highlights

Applied Materials reported record third quarter 2026 revenue of $9.12 billion, up 25% year over year, with strong customer demand.
GAAP EPS reached $3.17 and non-GAAP EPS set a new high at $3.50, up 41% over last year, as the company raised gross margin above 50% and returned $860 million to shareholders.
Shares of Applied Materials dropped 4.72% and trade below key short-term averages as momentum and oscillator signals indicate persistent downside, with a projected range of $490.45 to $528.19 over the next 2 to 3 trading days.

Operations and demand drive record gains despite equity selling pressure

Applied Materials posted record third quarter 2026 revenue of $9.12 billion, marking a 25% year-over-year increase and confirming robust customer demand, according to Manilatimes. Quarterly profitability also surged, with GAAP EPS reaching $3.17 and record non-GAAP EPS of $3.50, up 41% over the prior year, reflecting operational strength. The company documented a gross margin of over 50% and further expanded its R&D footprint with 11 EPIC Center partnerships, alongside returning $860 million to shareholders through buybacks and dividends as reported by Benzinga — though price action has remained under broader selling pressure.

Momentum weakens as selling dominates below technical resistance

AMAT is trading below its MA-20 at $541.7 and MA-50 at $537.1, while staying above the long-term MA-200 at $387. Price faces resistance at the Ichimoku Kijun level of $532.38. The recent range features a sharp gap of $33.53, with intraday volatility remaining high. Momentum signals are negative, as ADX shows a Sell, MACD is Neutral, and RSI sits at 30.28. Stochastic RSI, CCI, and Bull/Bear Power indicate oversold conditions and dominant selling, with the Awesome Oscillator aligning on the sell side.

Downside risk prevails as consolidation expected in volatility band

Over the next 2 to 3 trading days, AMAT is anticipated to fluctuate between $490.45 and $528.19, reflecting a typical volatility band relative to current levels. There is a 25% probability for an upward move, while the likelihood of further downside is estimated at 75%. The central scenario is for price to consolidate within this corridor, with a bullish break requiring sustained action above $532.38. If support at $490.45 fails, further weakness could be exposed.

Viktoras Karapetjanc, expert at Traders Union, sees underlying strength in AMAT's business as confirmed by stellar revenue and earnings growth. The market is reacting negatively in the short term, likely driven by profit-taking and broader sector sentiment. Karapetjanc believes the company’s expanding R&D partnerships and shareholder returns signal confidence in long-term value creation. He notes that technicals remain weak for now, but fundamentals are solidly supportive. "Despite the recent pullback, I view current weakness as an opportunity to accumulate shares in a fundamentally strong name with a positive long-term outlook."

Earlier, analysts noted that Applied Materials was displaying bullish technical patterns supported by sector momentum and expanding research partnerships, particularly ahead of earnings. The current breakdown below key moving averages and emergence of oversold conditions reflect a shift in the technical landscape, with traders advised to closely monitor support at $490.45 as the critical level for near-term downside risk.

Source of Data: AMAT Price Analysis by TU

The analysis is based on a proprietary model combining technical, on-chain, and expert data. Not investment advice. See methodology

The information is based on forecasts and does not constitute investment advice or a guarantee of future results. Market conditions may change. See our Disclaimer and Editorial Integrity for details.