Applied Materials Posts Record $9.12B Revenue on AI Chip Demand But Stock Falls 5%

Applied Materials forecasts quarterly revenue above estimates

Aug 13 (Reuters) - Applied Materials (AMAT.O), opens new tab forecast fourth-quarter revenue above Wall Street expectations on Thursday, betting that unabated demand for advanced ⁠AI chips will continue to fuel robust spending on its semiconductor manufacturing equipment. The company forecast quarterly revenue of ⁠around $10.25 billion, plus or minus $500 million, compared with analysts' ⁠average estimate of $9.54 billion, according to ⁠data compiled by LSEG. Reporting by ⁠Juby Babu in Mexico City; Editing by Shilpi Majumdar Our Standards: The Thomson Reuters Trust Principles., opens new tab

Applied Materials Q3 2026 earnings beat on AI demand

Applied Materials $AMAT reported record third-quarter revenue of $9.12 billion, up 25% from a year earlier, and raised its outlook for semiconductor systems growth as demand tied to artificial intelligence infrastructure continues to build. The company earned $2.54 billion in the third quarter, or $3.17 per diluted share, against year-ago figures of $1.78 billion, or $2.22 per diluted share. Adjusted earnings per share reached $3.50. Analysts had expected adjusted earnings of $3.40 per share and revenue of $8.99 billion, according to The Wall Street Journal. The semiconductor systems segment contributed $7.04 billion to the quarter's results, a jump from $5.56 billion in the same period last year. Applied global services added $1.78 billion, with that figure having grown from $1.46 billion a year ago. The company also generated record cash from operations of $3.04 billion and distributed $860 million to shareholders through share repurchases and dividends. "As the rapid global adoption of AI drives unprecedented demand for our materials engineering solutions, we are further raising our Semiconductor Systems revenue expectations for calendar 2026 and are confident we will grow faster than the market this year," Chief Executive Officer Gary Dickerson said in a statement. For the fiscal fourth quarter, the company said it expects revenue of $10.25 billion, plus or minus $500 million, and adjusted earnings of $4.02 per share, plus or minus $0.20. Analysts had been modeling fourth-quarter revenue of $9.55 billion and adjusted earnings of $3.71 per share, according to the Wall Street Journal. Chief Financial Officer Brice Hill told analysts that Applied Materials is targeting the capacity to produce twice its current quarterly semiconductor system volume by 2028 and has begun laying the groundwork for an additional manufacturing buildout intended to keep pace with demand into 2030. Applied Materials had raised its semiconductor equipment growth outlook to more than 30% for calendar 2026 after its second quarter, up from a prior forecast of more than 20%. On Thursday's call, Dickerson and Hill declined to provide a specific updated figure for the segment beyond the current quarter but said they expect growth to come in stronger than their May projection. The company said it expects continued demand across DRAM memory, leading-edge foundry-logic, and advanced packaging. Applied Materials stock fell about 5% in after-hours trading on Thursday.

Applied Materials delivers earnings and revenue above estimates, but Wall Street isn't impressed

Applied Materials Inc. beat expectations on both earnings and revenue as it delivered its third-quarter financial results today, and followed up with strong guidance for the current quarter. However, its stock fell in the wake of elevated expectations from investors. While the company is one of the biggest beneficiaries of the artificial intelligence boom, that trend means that it had a high bar to clear, and investors likely deemed its results weren't impressive enough. Its stock fell more than 4% in the after-hours trading session. The company reported earnings before certain costs such as stock compensation of $3.50 per share, up from $2.48 one year ago and above Wall Street's consensus estimate of $3.40 per share. Revenue for the period increased 25% to $9.12 billion, surpassing the Street's target of $9 billion. Chief Executive Gary Dickerson (pictured) hailed what was another record-breaking quarter that saw the company deliver its largest-ever sequential revenue growth. "As the rapid global adoption of AI drives unprecedented demand for our materials engineering solutions, we are further raising our semiconductor systems revenue expectations for calendar 2026 and are confident we will grow faster than the market this year," he said. For the current quarter, Applied expects revenue of around $10.25 billion at the midpoint of its guidance range, with earnings of $4.02 per share. It's a strong forecast. Wall Street is looking for sales of just $9.55 billion and earnings of $3.71 per share. Applied's cutting-edge semiconductor manufacturing equipment is essential to the chipmaking industry's efforts to ramp up its high-end chip production capacity. The company makes various kinds of machines that support different semiconductor manufacturing processes, catering to the most advanced silicon for AI, which requires expertise that few other companies possess. Its gear is bought by the world's biggest semiconductor manufacturers, including Taiwan Semiconductor Manufacturing Co. Ltd., Intel Corp. and Micron Technology Inc. The company's semiconductor systems business, which is by far its biggest, saw revenue grow from $5.56 billion in the year-ago period to $7.04 billion at the end of the latest quarter. Meanwhile, revenue from the applied global services segment rose from $1.46 billion a year earlier to $1.78 billion. While Applied's results and guidance did not impress investors, CFRA analyst Brooks Idlet told Reuters that its momentum is encouraging. "We think calendar year 2027 consensus estimates leave room for upside if recent strength continues," he said. Stifel analyst Brian Chin said the market's expectations for Applied were elevated because its biggest rivals, Lam Research Corp. and KLA Corp., both posted strong quarterly results of their own last week, along with bullish forecasts. The three companies are the main suppliers to the semiconductor industry, and are scrambling to grab a bigger slice of the fast-growing market for dynamic random access memory or DRAM, which is in huge demand globally. DRAM accounted for 26% of Applied's semiconductor systems revenue in the third quarter, up from 22% one year earlier. Foundry and logic equipment make up the remainder of the company's systems business. On a conference call with analysts, Applied Chief Financial Officer Brice Hill said the company plans to ramp up its manufacturing capacity in response to long-term demand signals for its products. It'll do this by expanding its existing facilities as well as its manufacturing and customer support teams. The goal is to add enough new capacity to double the company's quarterly semiconductor system output by 2028. In addition, the company is also planning a further capacity expansion to "ensure we have the option to support further increases in demand by 2030," Hill said.

What's Going On With Applied Materials Stock Friday? - Applied Materials (NASDAQ:AMAT)

Applied Materials Sees Another Record Year In 2027 As AI Demand Gives It 'Unprecedented Visibility' Applied Materials Posts Record Margins Applied Materials reported third-quarter revenue of $9.12 billion, above analyst estimates of $8.99 billion. Adjusted earnings of $3.50 per share also topped estimates of $3.40. Revenue rose 15% sequentially and 25% from a year earlier. Adjusted gross margin reached a record 50.4%, up 150 basis points year over year. That marked the company's 13th straight quarter of year-over-year gross margin expansion. Adjusted operating margin also hit a record 34%, up 330 basis points from a year earlier. The company generated more than $3 billion in operating cash flow and $2.3 billion in free cash flow. Applied Materials returned $860 million to shareholders through $420 million in dividends and $440 million in share repurchases. The company had $12.8 billion remaining under its buyback authorization. It continues to target returning 80% to 100% of free cash flow to shareholders. AI, DRAM Demand Fuel Semiconductor Growth Semiconductor Systems revenue reached a record $7 billion, up 18% sequentially and 27% year over year. Growth was driven by capacity additions for gate-all-around and FinFET technologies. DRAM revenue, including high-bandwidth memory packaging, jumped 52% from a year earlier to a record. The company also reported record revenue across several Materials Engineering businesses. Semiconductor Systems adjusted gross margin rose 190 basis points year over year to 55.4%. Adjusted operating profit climbed 45% to a record $2.7 billion. Applied Global Services revenue rose 22% to a record $1.8 billion, helped by subscription services and strong demand for transactional parts. Its gross margin increased 180 basis points to 35.6%, while operating margin rose 280 basis points to 30.1%. China accounted for 26% of Semiconductor Systems and Applied Global Services revenue. Applied Materials expects growth in the region during 2026, supported by 28-nanometer foundry investment. Meanwhile, the company launched six products during the quarter. The new systems target DRAM, high-bandwidth memory, advanced packaging and e-beam applications. Applied Materials Forecast Tops Estimates During the earnings call, Applied Materials said the rapid buildout of AI infrastructure is giving the company unusually strong visibility into future demand. Management said some customer conversations now extend to 2030, while longer-term commitments and rolling eight-quarter forecasts have improved planning. Based on what it called "unprecedented visibility" from customers, Applied Materials said it expects another strong record year in 2027. Applied Materials expects fourth-quarter revenue of $10.25 billion, plus or minus $500 million. That compares with analyst estimates of $9.54 billion. The company forecast adjusted earnings of $3.82 to $4.22 per share, compared with estimates of $3.69. Applied Materials expects Semiconductor Systems revenue of $7.9 billion and Applied Global Services revenue of $1.84 billion. Management expects AI infrastructure spending to support multiyear growth in leading-edge logic, DRAM and advanced packaging. Those three areas are expected to represent about 80% of wafer fab equipment growth in 2026 and 2027. The company has nearly doubled its manufacturing footprint and aims to double quarterly systems output by 2028. AMAT Price Action: Applied Materials shares were down 5.41% at $505.62 during premarket trading on Friday, according to Benzinga Pro data. The stock has surged 183.97% over the past 12 months. Photo via Shutterstock Market News and Data brought to you by Benzinga APIs To add Benzinga News as your preferred source on Google, click here.

Applied Materials earnings analysis: questions answered and next catalysts By Investing.com

Investing.com -- Applied Materials just delivered a record $9.12B in Q3 FY2026 revenue (up 25% YoY) and a record $3.50 EPS -- beating estimates on both top and bottom line. Yet shares dropped 5.65% after-hours, a classic "sell the news" after the stock had already priced in the AI supercycle. The real story is what management answered -- and what comes next. Applied Materials Inc (AMAT): Trading at $504.37 | Q3 Revenue $9.12B | Gross Margin 50.3% | Next Earnings: Nov 12, 2026 Questions the Earnings Call Answered How real is the AI equipment supercycle? Management confirmed what the numbers suggest: this isn't a blip. Semiconductor Systems revenue hit $7.04B (up from $5.56B a year ago), driven by gate-all-around (GAA) transistor adoption and extreme DRAM tightness. Applied expects 30%+ growth in its semiconductor equipment business for calendar 2026, with visibility extending beyond the prior 8-quarter horizon. Read full summary Can margins keep expanding? Yes -- and that's arguably the most underappreciated answer. Non-GAAP gross margin reached 50.3%, the highest in over 25 years. Since CEO Gary Dickerson took over in 2013, gross margins have expanded 800 basis points. Semiconductor Systems specifically is approaching 55%. The mechanism: value-based pricing on increasingly complex tools (you can't comparison-shop a GAA-enabling deposition system) plus manufacturing scale from new U.S., European, and Singapore facilities. What about China risk? China represented 24% of Semiconductor Systems and AGS revenue. Management guided that China and ICAPS business will remain "flat to slightly increase" through CY2026. Meanwhile, Samsung and SK Hynix are testing Chinese equipment maker AMEC as a hedge against export controls -- a dynamic that could reshape competitive dynamics. Read more Where is the next growth vector? Advanced packaging -- management expects packaging revenues to grow 50%+ in CY2026, fueled by AI accelerator demand for larger body packages. The pending NEXX acquisition bolsters panel-level technology and hybrid bonding capabilities. Applied is also the leading process equipment provider in HBM packaging, a critical bottleneck for AI chips. Next Catalysts on the Horizon The Consensus Trajectory Is Notable Analysts are modeling a step-function in Applied's earnings power: * FY2026E: EPS $12.34, Revenue $33.52B * FY2027E: EPS $17.40, Revenue $43.74B (+30% growth) * FY2028E: EPS $22.27, Revenue $52.76B EPS estimates have been revised up +39.7% over the past year -- a signal that analysts are still catching up to the demand curve. Read more on RBC's thesis The Bear Case Worth Watching Erste Group downgraded AMAT to Hold in August, citing a P/E above sector average and revenue/profit growth below peers. China's 24% revenue share remains vulnerable to policy shifts. And the stock's 4% after-hours dip on a strong quarter suggests expectations are elevated -- any deceleration in AI capex could trigger a sharper repricing. Read more This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.

Applied Materials Posts Higher 3Q Profit, Revenue on Continued AI Demand

Applied Materials reported a higher profit and revenue growth in the fiscal third quarter, as artificial-intelligence adoption continued to drive demand for the company's semiconductor solutions. The semiconductor-equipment maker on Thursday reported net income of $2.54 billion, or $3.17 a share, compared with a profit of $1.78 billion, or $2.22 a share, a year earlier. Stripping out certain one-time items, adjusted earnings were $3.50 a share. Analysts polled by FactSet were expecting $3.40 a share. Revenue rose to $9.12 billion, up from $7.3 billion a year earlier and beating analysts' estimates of $8.99 billion. In the company's semiconductor systems segment, revenue grew to $7.04 billion from $5.56 billion a year prior. Revenue from the applied global services segment rose to $1.78 billion from $1.46 billion. "As the rapid global adoption of AI drives unprecedented demand for our materials engineering solutions, we are further raising our Semiconductor Systems revenue expectations for calendar 2026 and are confident we will grow faster than the market this year," Chief Executive Officer Gary Dickerson said. The company is also expecting "another strong growth year" in 2027, Dickerson added. For the current fiscal fourth quarter, the company said it expects adjusted earnings of between $3.82 and $4.22 a share, on revenue between $9.75 billion and $10.75 billion. Analysts were expecting fourth-quarter adjusted earnings of $3.71 a share on $9.55 billion of revenue. The revenue projection includes around $7.9 billion in semiconductor systems revenue and $1.84 billion in applied global services revenue. Shares of Applied Materials retreated 2.9% to $519.00 in after-hours trading on Thursday.