Applied Materials (NASDAQ:AMAT) Posts Earnings Results, Beats Expectations By $0.10 EPS

Applied Materials (NASDAQ:AMAT) issued its quarterly earnings results on Thursday. The manufacturing equipment provider reported $3.50 earnings per share (EPS) for the quarter, topping analysts’ consensus estimates of $3.40 by $0.10, FiscalAI reports. The business had revenue of $9.12 billion during the quarter, compared to analyst estimates of $8.99 billion. Applied Materials had a net margin of 29.31% and a return on equity of 36.97%. 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 Performance

Shares of AMAT traded down $13.61 during trading hours on Thursday, reaching $534.54. 12,728,254 shares of the company’s stock traded hands, compared to its average volume of 8,229,762. The firm has a market capitalization of $424.40 billion, a price-to-earnings ratio of 50.19, a P/E/G ratio of 1.33 and a beta of 1.61. The business’s fifty day simple moving average is $563.06 and its two-hundred day simple moving average is $444.45. Applied Materials has a twelve month low of $154.46 and a twelve month high of $739.67. The company has a debt-to-equity ratio of 0.22, a current ratio of 2.51 and a quick ratio of 1.80.

Applied Materials Announces Dividend

The firm also recently declared a quarterly dividend, which will be paid on Thursday, September 10th. Stockholders of record on Thursday, August 20th will be issued a dividend of $0.53 per share. This represents a $2.12 dividend on an annualized basis and a dividend yield of 0.4%. The ex-dividend date of this dividend is Thursday, August 20th. Applied Materials’s dividend payout ratio (DPR) is 19.91%.

Wall Street Analyst Weigh In

A number of equities analysts recently commented on the company. Susquehanna lifted their price target on Applied Materials from $575.00 to $900.00 and gave the stock a “positive” rating in a research note on Tuesday, June 30th. Zacks Research raised shares of Applied Materials from a “hold” rating to a “strong-buy” rating in a research report on Wednesday, July 1st. Cantor Fitzgerald raised their target price on shares of Applied Materials from $650.00 to $850.00 and gave the stock an “overweight” rating in a report on Monday, June 29th. Weiss Ratings restated a “buy (b-)” rating on shares of Applied Materials in a research note on Wednesday, June 24th. Finally, HC Wainwright set a $850.00 target price on Applied Materials in a report on Monday, June 29th. One equities research analyst has rated the stock with a Strong Buy rating, twenty-six have given a Buy rating and eight have assigned a Hold rating to the company’s stock. According to data from MarketBeat, the company presently has a consensus rating of “Moderate Buy” and an average price target of $603.23.

Insider Transactions at Applied Materials

In related news, SVP Omkaram Nalamasu sold 24,263 shares of the business’s stock in a transaction that occurred on Tuesday, June 16th. The stock was sold at an average price of $593.43, for a total transaction of $14,398,392.09. Following the sale, the senior vice president owned 146,916 shares of the company’s stock, valued at $87,184,361.88. The trade was a 14.17% decrease in their ownership of the stock. The sale was disclosed in a document filed with the Securities & Exchange Commission, which is available at the SEC website. Also, insider Prabu G. Raja sold 50,000 shares of the stock in a transaction on Thursday, June 4th. The shares were sold at an average price of $505.28, for a total value of $25,264,000.00. Following the sale, the insider owned 356,642 shares of the company’s stock, valued at $180,204,069.76. This trade represents a 12.30% decrease in their position. The disclosure for this sale is available in the SEC filing. Insiders have sold a total of 278,088 shares of company stock worth $169,654,805 over the last ninety days. Insiders own 0.30% of the company’s stock.

Institutional Inflows and Outflows

Several institutional investors have recently made changes to their positions in the company. Wilkerson Advisory Group LLC purchased a new position in Applied Materials during the 4th quarter worth approximately $26,000. Triumph Capital Management purchased a new stake in shares of Applied Materials in the third quarter valued at $38,000. Swiss RE Ltd. acquired a new stake in shares of Applied Materials in the fourth quarter worth $75,000. Rakuten Securities Inc. grew its holdings in shares of Applied Materials by 38.9% during the second quarter. Rakuten Securities Inc. now owns 439 shares of the manufacturing equipment provider’s stock valued at $80,000 after buying an additional 123 shares in the last quarter. Finally, Kemnay Advisory Services Inc. acquired a new position in Applied Materials during the fourth quarter valued at $81,000. 80.56% of the stock is owned by hedge funds and other institutional investors.

Key Headlines Impacting Applied Materials

Here are the key news stories impacting Applied Materials this week:

• Positive Sentiment: Quarterly results exceeded expectations. Applied Materials reported adjusted earnings of $3.50 per share versus the $3.38–$3.40 consensus range, while revenue of $9.12 billion topped estimates near $9.0 billion. EPS increased from $2.48 a year earlier, and revenue grew approximately 25%. Applied Materials Beats Q3 Earnings and Revenue Estimates
• Positive Sentiment: Management issued above-consensus fourth-quarter guidance. The company expects adjusted EPS of $3.82–$4.22 and revenue of $9.8–$10.8 billion, compared with Wall Street estimates of $3.65 and $9.5 billion, respectively. Management cited strong, ongoing demand for advanced chips tied to artificial-intelligence infrastructure. Applied Materials Forecasts Quarterly Revenue Above Estimates
• Positive Sentiment: AI-related semiconductor investment remains a key growth driver for Applied Materials, with analysts highlighting continued demand for its manufacturing solutions and the company’s investments in advanced process and materials research. Applied Materials Posts Higher Profit, Revenue on Continued AI Demand

About Applied Materials

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.