Applied Materials Posts Record $10.4 Billion Quarter, Up 53%, and Guides Above Forecasts on AI Chip Demand

Applied Materials reported record revenue and earnings for its fiscal fourth quarter and forecast further growth in the current quarter, as demand for chipmaking equipment tied to artificial intelligence lifted sales of tools for memory chips and advanced packaging. The Santa Clara, California-based company released the results after the market close on Thursday, Nov. 12, 2026, and its shares were little changed in premarket trading on Friday, Nov. 13.

Revenue for the quarter ended Oct. 25 rose 53% from a year earlier to a record $10.41 billion, the company said in its earnings release. Adjusted earnings per share climbed 92% to a record $4.16, while earnings under generally accepted accounting principles rose 43% to $3.40 per share. Net income on a GAAP basis was $2.72 billion, up from $1.90 billion a year earlier.

Analysts had expected revenue of $10.30 billion and adjusted earnings of $4.05 per share, MarketDash reported. Investor's Business Daily said the company beat Wall Street's targets for the quarter and with its outlook.

Margins and segment results

Adjusted gross margin widened 2.5 percentage points from a year earlier to 50.6%, and adjusted operating margin reached a record 35.3%, compared with 28.6% in the same quarter of 2025. Record cash from operations of $3.30 billion produced free cash flow of $2.62 billion.

The Semiconductor Systems segment, which sells equipment used to make chips, generated revenue of $8.00 billion, up 64% from $4.88 billion a year earlier. DRAM memory customers accounted for 33% of that segment's sales, up from 28%, while foundry and logic customers made up 58%, down from 66%, and flash memory 9%. The Applied Global Services unit, which provides parts and services for installed equipment, grew revenue 26% to $1.90 billion.

By geography, Taiwan was the largest market with $2.92 billion in sales, or 28% of the total, followed by China at $2.64 billion, or 25%, down from 29% a year earlier. South Korea contributed $1.81 billion and the United States $1.32 billion.

Full-year record and shareholder returns

For fiscal 2026, revenue rose 21% to a record $34.45 billion and adjusted earnings per share increased 37% to $12.89. GAAP earnings per share were $12.62. In the fourth quarter alone the company returned $2.42 billion to shareholders, including $2.00 billion of share repurchases, which CFO Brice Hill said was the largest quarterly buyback in more than eight years, and $421 million in dividends. Regular full-time employees numbered about 41,500 at the end of the quarter, up from 36,500 a year earlier.

During the quarter, the company also unveiled its EPIC Center, a research and development facility in Silicon Valley, and added four new research partnerships there, bringing the total number of announced EPIC engagements to 15, according to the release.

"AI continues to fuel strong incremental demand for semiconductors," President and CEO Gary Dickerson said in the release, adding that the company is on track to grow its Semiconductor Systems business more than 40% in calendar 2026.

Outlook for the first quarter

Applied forecast fiscal first-quarter revenue of $11.1 billion, plus or minus $500 million, and adjusted earnings of $4.35 per share, plus or minus 20 cents. Analysts had expected $10.89 billion in revenue and $4.26 per share, according to MarketDash.

On the earnings call, executives said they expect the wafer fabrication equipment market to grow more than 30% in 2027 and cloud capital spending to exceed $1 trillion next year, according to a transcript published by The Motley Fool. Management said advanced packaging revenue is projected to rise about 90% in calendar 2026 and inspection and metrology revenue more than 50%. The company said it is investing to double its systems output from fourth-quarter levels by 2028 and expects China to represent less than 25% of its business in 2027.

Share reaction

Applied Materials shares were down 0.09% at $380.59 in Friday premarket trading, according to MarketDash. The results come during a volatile week for semiconductor stocks after the resignation of Nvidia Chief Executive Jensen Huang, and ahead of Nvidia's own quarterly report scheduled for Tuesday, Dow Jones reported.