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Applied Materials (AMAT) flagged a modest revenue hit from the Commerce Department’s new “Affiliates Rule,” estimating an approximate $110 mln impact to 4Q25 revenue and $600 mln to FY26. While the amounts are manageable, the disclosure adds another layer of uncertainty on top of existing China weakness.

• The new BIS Rule expands export restrictions to entities 50%+ owned by companies on the Entity List, requiring licenses for many affiliates previously exempt.
• The estimated impact for Q4 and FY26 is around 2% of total revenue, based on AMAT's Q4 guidance and the FY26 FactSet Consensus estimate.
• AMAT had already guided conservatively, with Q4 revenue of $6.20-$7.20 bln and China’s share expected to fall to 29% from 35% in Q3.
• Peers like KLA Corp (KLAC), Lam Research (LRCX), and ASML (ASML) may also see incremental revenue pressure from the broadened restrictions.
• AMAT shares have rallied by about 40% since early September on AI and DRAM/HBM demand optimism, but export headlines introduce near-term volatility.

Briefing.com Analyst Insight:

The BIS Affiliates Rule is a manageable financial headwind but adds another risk factor to AMAT’s China exposure. The company remains well-positioned for memory-led growth and AI infrastructure spending, yet licensing delays and regulatory uncertainty may temper near-term sentiment. Longer term, the scale of demand in DRAM and HBM should outweigh the regulatory drag, but investors should expect choppier quarterly results as U.S.-China policy friction persists. This makes the stock more attractive on pullbacks rather than at current highs, in our view.