With a market cap of $144 billion, Applied Materials, Inc. (AMAT) provides manufacturing equipment, services, and software to the semiconductor, display, and related industries. The Santa Clara, California-based company operates through three segments: Semiconductor Systems; Applied Global Services; and Display and Adjacent Markets, enhancing device performance and efficiency.

Companies valued at $10 billion or more are generally considered “large-cap” stocks and Applied Materials fits this criterion perfectly, exceeding the mark. Applied Materials is renowned as the world's second-largest semiconductor equipment supplier, with advanced expertise in manufacturing technologies that drive innovation in chip fabrication and display production.

The semiconductor equipment company pulled back 28.4% from its 52-week high of $255.89.  Shares of AMAT are down 7.1% over the past three months, underperforming the broader S&P 500 Index's ($SPX) 7.1% rise in the same period.

Longer term, on a YTD basis, shares of Applied Materials have surged 13.1%, lagging behind SPX's 26.8% increase. Also, Applied Materials has risen 20.9% over the past 52 weeks, compared to SPX's 31.6% return.

AMAT has been in a bearish trend, trading below its 50-day and 200-day moving averages since mid-October.

Applied Materials has underperformed due to a cyclical downturn in the semiconductor market, particularly in DRAM and NAND memory segments, geopolitical tensions with China, and broader macroeconomic challenges like inflation and high interest rates.

Moreover, the stock tumbled 9.2% on Nov. 15 due to disappointing revenue guidance in its Q4 earnings report, primarily driven by weakness in China. The company is pulling business out of China to comply with regulations restricting advanced semiconductor technology sharing, contributing to headwinds in the region. While overall revenue grew 5% year-over-year to $7.1 billion, surpassing estimates, its forecast for the fiscal Q1 fell below consensus expectations at $7.1 billion - $7.2 billion, signaling muted growth. Additionally, a projected 28% drop in display revenue compounded concerns, reflecting broader industry challenges and market volatility.

However, the stock’s rival, Lam Research Corporation (LRCX), has seen a 8.7% rise over the past 52 weeks and a marginal gain on a YTD basis, lagging behind AMAT's performances in both periods. 

Despite AMAT’s underperformance relative to SPX over the past year, analysts are moderately optimistic about the stock's prospects. The stock has a consensus rating of “Moderate Buy” from the 33 analysts covering it, and it is currently trading below the mean price target of $221.88.