Applied Materials (NASDAQ:AMAT – Get Free Report) announced its quarterly earnings data on Thursday. The manufacturing equipment provider reported $3.50 earnings per share for the quarter, beating analysts’ consensus estimates of $3.40 by $0.10, FiscalAI reports. Applied Materials had a net margin of 29.31% and a return on equity of 36.97%. The firm had revenue of $9.12 billion during the quarter, compared to analysts’ expectations of $8.99 billion. Applied Materials updated its Q4 2026 guidance to 3.820-4.220 EPS.
Here are the key takeaways from Applied Materials’ conference call:
- Applied Materials raised its growth outlook, citing stronger-than-expected AI infrastructure demand, customer fab additions, and longer-term commitments. Management now expects 2026 systems growth above its prior “greater than 30%” forecast and another strong growth year in 2027.
- Fiscal Q3 delivered records across key metrics, including $9.1 billion of revenue, $3.50 in non-GAAP EPS, 50.4% gross margin, and 34% operating margin. Fiscal Q4 guidance calls for $10.25 billion of revenue and $4.02 of non-GAAP EPS, representing year-over-year growth of 51% and 85%, respectively.
- Growth is concentrated in Applied’s strongest businesses: DRAM revenue rose 52% year over year, advanced packaging revenue is expected to grow more than 70% in calendar 2026, Applied Global Services is expected to grow more than 20%, and process diagnostics and control more than 50%. Management also sees ICAPS returning to growth next year.
- Applied is expanding manufacturing and support capacity to potentially double quarterly system output from current levels by 2028, adding more than 1,500 employees this quarter. The company also reported $2.3 billion of free cash flow and plans to return 80%-100% of free cash flow to shareholders.
- Near-term margin expansion may be restrained by ramp costs from hiring and training employees, while display revenue is expected to create an unfavorable mix effect. Management also expects a higher global-minimum-tax burden in 2027, with the tax rate rising to approximately 13% from about 11% currently.
Applied Materials Stock Down 2.5%
Shares of AMAT stock traded down $13.61 on Thursday, reaching $534.54. 12,728,254 shares of the stock were exchanged, compared to its average volume of 8,229,762. The company has a market capitalization of $424.40 billion, a price-to-earnings ratio of 50.19, a PEG ratio of 1.33 and a beta of 1.61. The business’s 50 day moving average price is $563.06 and its 200 day moving average price is $444.45. The company has a current ratio of 2.51, a quick ratio of 1.80 and a debt-to-equity ratio of 0.22. Applied Materials has a twelve month low of $154.46 and a twelve month high of $739.67.
Applied Materials Announces Dividend
Analysts Set New Price Targets
AMAT has been the subject of several recent research reports. Needham & Company LLC raised their price target on shares of Applied Materials from $530.00 to $740.00 and gave the company a “buy” rating in a research report on Friday, July 10th. B. Riley Financial increased their price objective on Applied Materials from $550.00 to $790.00 and gave the company a “buy” rating in a research note on Friday, June 26th. Susquehanna lifted their target price on Applied Materials from $575.00 to $900.00 and gave the company a “positive” rating in a report on Tuesday, June 30th. Truist Financial set a $575.00 target price on Applied Materials in a research note on Thursday, May 28th. Finally, Citigroup restated a “buy” rating on shares of Applied Materials in a report on Monday, August 3rd. One analyst has rated the stock with a Strong Buy rating, twenty-six have assigned a Buy rating and eight have assigned a Hold rating to the company. Based on data from MarketBeat.com, the stock presently has an average rating of “Moderate Buy” and an average price target of $603.23.
View Our Latest Research Report on AMAT
Insider Activity at Applied Materials
In other Applied Materials news, insider Prabu G. Raja sold 10,000 shares of Applied Materials stock in a transaction dated Thursday, June 18th. The stock was sold at an average price of $633.53, for a total transaction of $6,335,300.00. Following the completion of the sale, the insider directly owned 346,642 shares of the company’s stock, valued at $219,608,106.26. The trade was a 2.80% decrease in their position. The sale was disclosed in a filing with the Securities & Exchange Commission, which is available at this link. Also, Director Thomas J. Iannotti sold 9,250 shares of the company’s stock in a transaction dated Tuesday, June 16th. The stock was sold at an average price of $599.77, for a total value of $5,547,872.50. Following the transaction, the director directly owned 40,559 shares of the company’s stock, valued at approximately $24,326,071.43. This represents a 18.57% decrease in their ownership of the stock. The SEC filing for this sale provides additional information. Insiders sold 278,088 shares of company stock worth $169,654,805 over the last three months. Company insiders own 0.30% of the company’s stock.
Institutional Investors Weigh In On Applied Materials
A number of institutional investors and hedge funds have recently bought and sold shares of the stock. UBS AM A Distinct Business Unit of UBS Asset Management Americas LLC lifted its holdings in shares of Applied Materials by 617.2% during the third quarter. UBS AM A Distinct Business Unit of UBS Asset Management Americas LLC now owns 9,129,483 shares of the manufacturing equipment provider’s stock worth $1,869,170,000 after purchasing an additional 7,856,576 shares during the period. Coatue Management LLC increased its stake in Applied Materials by 78.7% in the 4th quarter. Coatue Management LLC now owns 5,984,332 shares of the manufacturing equipment provider’s stock valued at $1,537,913,000 after buying an additional 2,635,284 shares during the period. Maverick Capital Ltd. acquired a new position in Applied Materials in the 4th quarter valued at $290,727,000. Price T Rowe Associates Inc. MD boosted its stake in shares of Applied Materials by 18.5% in the fourth quarter. Price T Rowe Associates Inc. MD now owns 5,384,256 shares of the manufacturing equipment provider’s stock valued at $1,383,701,000 after buying an additional 840,486 shares in the last quarter. Finally, Janus Henderson Group PLC grew its holdings in Applied Materials by 687.2% during the fourth quarter. Janus Henderson Group PLC now owns 830,219 shares of the manufacturing equipment provider’s stock worth $213,280,000 after acquiring an additional 724,759 shares during the period. 80.56% of the stock is owned by hedge funds and other institutional investors.
More Applied Materials News
Here are the key news stories impacting Applied Materials this week:
- Positive Sentiment: Results exceeded expectations: Applied Materials reported adjusted earnings of $3.50 per share, above the $3.40 consensus estimate, while revenue reached $9.12 billion versus expectations of $8.99 billion. Revenue growth was supported by continued demand for semiconductor equipment tied to artificial-intelligence infrastructure. Applied Materials Announces Third Quarter 2026 Results
- Positive Sentiment: Optimistic fourth-quarter outlook: Management guided to fiscal fourth-quarter EPS of $3.82–$4.22 and revenue of $9.8 billion–$10.8 billion, both above Wall Street estimates of $3.65 per share and $9.5 billion in revenue. The forecast reflects management’s view that demand for advanced AI chips remains robust. Applied Materials forecasts quarterly revenue above estimates
- Neutral Sentiment: AI remains the central investment theme: Analysts and investors continue to view Applied Materials as a key “picks-and-shovels” supplier to the AI chip industry. The company’s research collaboration with UC Berkeley and broader semiconductor R&D efforts add support to its long-term technology positioning, although these initiatives are unlikely to materially affect near-term results. Investors react to Applied Materials expanding its AI chip R&D
- Negative Sentiment: High expectations pressured the stock: AMAT fell in late trading despite the earnings beat and raised outlook. Coverage pointed to the demanding expectations following a substantial year-to-date rally, with investors potentially concerned about valuation, margin pressure and the company’s China exposure. A put-to-call ratio above 1 also indicated cautious positioning ahead of the report. Why Applied Materials Stock Is Down After Hours
Applied Materials Company Profile
Applied Materials, Inc is a U.S.-based supplier of equipment, services and software used to manufacture semiconductor chips, flat panel displays and other advanced materials. Headquartered in Santa Clara, California, the company designs and sells capital equipment and related technologies that enable production of integrated circuits, display panels and materials used across the electronics supply chain.
Applied Materials’ offerings include process equipment and factory software that support critical steps in device fabrication, such as deposition, etch, implantation, inspection and metrology, as well as systems for packaging and advanced heterogeneous integration.
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