We’ve now crossed the 90% mark of S&P 500 companies reporting this season - and what a season it has been.
We have seen a steady drumbeat of upside surprises, with S&P 500 earnings estimates climbing to fresh all-time highs.
That’s not bearish... Strong markets need strong fundamentals - and right now, the backdrop is delivering.
But let’s not get complacent... Not every report has been a victory lap.
Friday’s release from Applied Materials $AMAT was one of the ugliest market misses this season - a sharp reminder that even in the healthiest environments, landmines still lurk beneath the surface.
That's precisely why we're working so closely with Herb Greenberg- to identify the weak links in the market.
Here are the latest earnings stats for AMAT 👇
*Click the image to enlarge it
The only earnings reaction on Friday came from the $130B leader in Semiconductor Equipment & Materials, Applied Materials.
The stock had a -5.73 reaction score after reporting a double beat.
They posted revenues of $7.30B, versus the expected $7.22B, and earnings per share of $2.48, versus the expected $2.36.
While the headline numbers seemed fine, the market was disgusted by this report.
AMAT had its worst earnings reaction this century 🩸
As you can see, Applied Materials has been consistently punished for reporting earnings for years.
However, this quarter's reaction was different... The selling pressure was more intense than we've seen in decades.
As one of the most important companies in the semiconductor supply chain, this doesn't bode well for the semiconductor bulls.
Now, let's dive into what sparked this selloff.
AMAT had its 6th consecutive negative earnings reaction 🩸
Applied Materials crashed 14.1% after this earnings report, and here's what happened:
They reported an all-time high revenue number, growing 8% year-over-year.
However, the management team openly stated that this isn't sustainable... They expect a 29% decline in Chinese revenue due to saturation in that customer base.
In addition, they are one of the most vulnerable companies to tariffs and export controls.
This was an absolute disaster of an earnings reaction from one of the most important companies in the semiconductor supply chain.
While players like Nvidia $NVDA and Broadcom $AVGO are much less exposed to the same headwinds, this is still a major red flag for semiconductor bulls.
The stock looked good ahead of this report as the price was holding above the VWAP anchored to the all-time high.
However, the bears blasted the price right through that level. Now, it looks like a retest of the April low is inevitable.
So long as AMAT holds below 175, the path of least resistance is decisively lower for the foreseeable future.
Thank you for reading
-The Beat Team
P.S. When earnings season is this good, it’s easy to get swept up in the upside. But the landmines don’t disappear - they just get harder to see.
That’s where Herb Greenberg comes in. With his Red Flag Alerts, he digs into the numbers, management guidance, and market psychology to uncover the weak links hiding beneath the surface.
His work is designed to help investors sidestep the blowups before they happen.
If you’re serious about protecting your portfolio - and not getting blindsided by the next $AMAT-style collapse - you need Herb on your side.
