Applied Materials Inc. suffered the worst single-day stock decline in five years after giving a disappointing sales and profit forecast, renewing concerns that the US trade dispute with China is weighing on demand.

Analysts wonder if China’s recent “overspending” on chip equipment is coming to a halt — and if the company is losing market share to rivals.

Lam Research ( LRCX -6.93%), one of a handful of large companies manufacturing equipment for the production of semiconductors, tumbled 6.9% through 1:45 p.m. ET this afternoon. As unbelievable as it may sound, you can blame one of Lam's big rivals, Applied Materials ( AMAT -13.98%), for Lam's troubles.

The lower guidance prompted a rapid sell-off of Applied Material’s shares, and its stock fell more than 13% in extended trading. Following that decline, the company’s stock is now up just 15% in the year to date, slightly ahead of the S&P 500 Index, which has gained just over 10% so far this year.

Shares of Applied Materials Inc (NASDAQ: AMAT) tanked despite upbeat fiscal Q3 results. BofA downgraded, Goldman Sachs reiterated buy, Needham kept buy.

China is pulling back on purchases of semiconductor manufacturing equipment -- and KLA sells nearly as much stuff to China as Applied does. An earnings warning from Applied Materials just spooked KLA stock investors.

U.S. stock futures edge higher as Dow leads on health-care surge, tech lags behind- U.S. stock futures were mixed early Friday, signaling a cautious but upward-tilted open for Wall Street after a week that tested investor nerves with hotter-than-expected inflation data and a flurry of corporate earnings surprises.