Aug 14 (Reuters) - Applied Materials ( AMAT ) shares fell about 5% in premarket trading on Friday, as the chip equipment maker's upbeat outlook failed to soothe investors worried about the threat from intensifying competition.

The muted reaction illustrates the high bar chip stocks have to clear and suggests that investors have little tolerance for any hint that a company may be falling behind peers.

After a sharp rally that has more than doubled Applied's shares this year, investors want clearer signals that the company's growth is outpacing rivals in the wafer-fab-equipment market.

Summit Insights Group said Applied's topline performance has lagged peers such as Dutch chip-equipment maker ASML and Lam Research.

The company forecast fourth-quarter revenue of about $10.25 billion a day earlier, above the $9.54 billion consensus estimate and forecast that margin would be steady at 50.4% in the October quarter.

Morgan Stanley said the flat outlook was not a major concern amid capacity expansion, but leaves the company exposed to investor demands.

Rivals Lam Research and KLA last month reported upbeat results, and ASML lifted its 2026 outlook.

Applied Materials ( AMAT ) shares are at 32.14 times the expected earnings over the next 12 months, according to data from LSEG. That compares with 34.59, 36.85 and 33.39 for Lam, KLA and ASML, respectively.

(Reporting by Akriti Shah in Bengaluru; Editing by Mrigank Dhaniwala)