In September, the last time we took a look at the stocks of the largest manufacturers of chip-making machinery, we found just one that had not posted double-digit gains over the past 12 months. Research from Gartner Inc. (NYSE: IT) noted that capital spending by chip making companies dropped by 8.5% in the first half of 2013, on top of a decline of 16.1% in 2012.

That was the bad news. The good news was that capital spending would pick up in the second half of this year and rise by 15.4% in 2014 and 17% in 2015. Sales of wafer fabrication equipment are expected to grow by nearly 15% in 2014 and almost 20% in 2015.

These numbers seemed to augur well for the equipment makers like ASML Holding N.V. (NASDAQ: ASML) and Applied Materials Inc. (NASDAQ: AMAT). But after Applied Materials reported fiscal fourth-quarter results after markets closed Thursday night, the projection of a second-half rise looks a little shaky. Earnings per share (EPS) were a penny better than the consensus estimate and revenues were also slightly better than expected, $1.99 billion versus an estimate of $1.98 billion.

But the outlook for the current quarter calls for EPS in the range of $0.20 to $0.24 against a consensus estimate of $0.24. Revenue is forecast to rise 3% to $10%, a range of $2.05 billion to $2.19 billion, a little shy of the consensus estimate of $2.21 billion. Applied Materials is not yet really confident that the turnaround that Gartner saw is happening.

Netherlands-based ASML reported third-quarter results in mid-October and missed EPS estimates by $0.16, even though sales were up sequentially, and the company’s outlook projected that sales would rise from €1.32 billion to €1.8 billion in the current quarter. ASML expects demand in the first half of 2014 to be flat with its second-half 2013 sales. Apparently the Dutch do not believe Gartner’s estimate either.

Since mid-September ASML’s share price has dropped by around 6%, while Applied Materials’ has risen by about 8%. Two downgrades from Buy to Hold followed immediately on ASML’s third-quarter report. The soft numbers out of Applied Materials Thursday night probably will not help the stock Friday, as the entire chip equipment sector is likely to get knocked down.

Applied Materials is also in the distracting process of completing a $29 billion merger with (actually a $9 billion buyout of) Tokyo Electron, which is expected to close in the second quarter of 2013. The merger will help close the size gap it has with ASML, which has a market cap near $40 billion.

Shares of Applied Materials closed at $17.56 on Thursday, in a 52-week range of $9.95 to $18.18. The consensus price target from Thomson Reuters is $18.30.

In after-hours trading, Applied Materials lost nearly 1%, and given the relatively weak outlook for the current quarter, a further decline is possible when trading begins Friday. ASML shares closed at $88.90 Thursday, in a 52-week range of $53.93 to $101.85. The consensus price target on the stock is around $94.00.

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