Applied Materials Forecasts Q4 Revenue Above Estimates Fueled by Surging AI Chip Demand
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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 â AI chips will continue to fuel robust spending on its semiconductor manufacturing equipment. The company forecast quarterly revenue of â around $10.25 billion, plus or minus $500 million, compared with analysts' â average estimate of $9.54 billion, according to â data compiled by LSEG. Reporting by â Juby Babu in Mexico City; Editing by Shilpi Majumdar Our Standards: The Thomson Reuters Trust Principles., opens new tab
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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.
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Applied Materials issued an optimistic forecast for Q4 revenue of around $10.25 billion, significantly exceeding Wall Street estimates of $9.54 billion. The semiconductor equipment maker reported strong Q3 results with net income of $2.54 billion and revenue of $9.12 billion, driven by AI-driven demand for semiconductor solutions. CEO Gary Dickerson cited unprecedented AI adoption as the catalyst for raising 2026 expectations.
Applied Materials Exceeds Q3 Expectations with Strong AI-Driven Performance
Applied Materials delivered robust fiscal third-quarter results that surpassed analyst projections, signaling the semiconductor manufacturing equipment maker's ability to capitalize on AI chip demand. The company 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
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. Revenue climbed to $9.12 billion from $7.3 billion year-over-year, beating Wall Street estimates of $8.99 billion2
.Stripping out one-time items, adjusted earnings reached $3.50 a share, exceeding the FactSet consensus of $3.40 a share
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. The semiconductor systems revenue segment grew to $7.04 billion from $5.56 billion a year prior, while the applied global services segment rose to $1.78 billion from $1.46 billion2
. These figures underscore sustained demand for advanced AI chips and the critical role Applied Materials plays in enabling their production.Optimistic Forecast Points to Continued AI-Fueled Growth
Applied Materials forecasts quarterly revenue above estimates for its fourth quarter, projecting around $10.25 billion, plus or minus $500 million
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. This guidance significantly surpasses analysts' average estimate of $9.54 billion compiled by LSEG1
. The company expects Q4 adjusted earnings between $3.82 and $4.22 a share on revenue between $9.75 billion and $10.75 billion, compared to analyst expectations of $3.71 a share on $9.55 billion of revenue2
.The revenue projection includes approximately $7.9 billion in semiconductor systems revenue and $1.84 billion in applied global services revenue
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. This strong financial outlook reflects the company's confidence in maintaining momentum as AI adoption accelerates across industries.CEO Raises 2026 Expectations Amid Unprecedented AI Demand
Gary Dickerson, Chief Executive Officer of Applied Materials, attributed the company's performance to the rapid global adoption of AI driving unprecedented demand for materials engineering solutions. "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," Dickerson said
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.Dickerson also indicated that the company expects "another strong growth year" in 2027
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. This forward-looking statement suggests Applied Materials sees AI-driven demand for semiconductor solutions as a multi-year tailwind rather than a temporary spike. The company's ability to outpace market growth positions it as a key beneficiary of the AI infrastructure buildout.Related Stories
Market Reaction and What Investors Should Watch
Despite the optimistic forecast and strong Q3 profit, shares of Applied Materials retreated 2.9% to $519.00 in after-hours trading on Thursday
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. This market reaction may reflect profit-taking after a strong run or concerns about sustaining growth rates at current levels. Investors should monitor whether the company can maintain its pace of outperforming Wall Street estimates as competition intensifies in semiconductor manufacturing equipment.The short-term implications center on Applied Materials' ability to meet its elevated Q4 guidance amid potential supply chain constraints or shifts in customer spending patterns. Long-term, the company's success hinges on whether AI adoption continues at its current trajectory and whether new applications emerge that require even more advanced semiconductor solutions. Watch for updates on customer capital expenditure plans, particularly from major chip manufacturers, and any signs of capacity constraints that could limit Applied Materials' ability to fulfill orders.
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