Applied Materials (NASDAQ:AMAT) Releases Quarterly Earnings Results, Beats Estimates By $0.10 EPS

Applied Materials (NASDAQ:AMAT) announced its earnings results on Thursday. The manufacturing equipment provider reported $3.50 EPS for the quarter, beating the consensus estimate of $3.40 by $0.10, FiscalAI reports. The business had revenue of $9.12 billion for the quarter, compared to the consensus estimate of $8.99 billion. Applied Materials had a return on equity of 39.58% and a net margin of 30.05%.The company’s revenue was up 24.8% on a year-over-year basis. During the same period last year, the business posted $2.48 EPS. 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 5.1%

NASDAQ AMAT traded down $27.36 on Friday, reaching $507.18. The stock had a trading volume of 13,111,133 shares, compared to its average volume of 7,579,454. The business has a 50 day moving average price of $564.15 and a 200 day moving average price of $444.89. 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 1 year low of $154.46 and a 1 year high of $739.67. The company has a market capitalization of $402.68 billion, a price-to-earnings ratio of 43.72, a P/E/G ratio of 1.35 and a beta of 1.61.

Applied Materials Dividend Announcement

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

Key Stories Impacting Applied Materials

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

• Positive Sentiment: Record quarterly performance: Fiscal Q3 revenue rose 24.8% year over year to $9.12 billion, ahead of the $8.99 billion consensus estimate, while adjusted EPS of $3.50 exceeded expectations. AI infrastructure demand, advanced packaging and memory spending supported growth. Applied Materials Q3 Earnings Beat Estimates, Revenues Rise Y/Y
• Positive Sentiment: Above-consensus outlook: Management projected fiscal Q4 revenue of approximately $9.8 billion to $10.8 billion and EPS of $3.82 to $4.22, both above analyst expectations. The company also pointed to stronger systems growth and unusually long customer visibility into fiscal 2027 and beyond. Applied Materials Forecasts Quarterly Revenue Above Estimates
• Positive Sentiment: Analyst and institutional support: JPMorgan, RBC, TD Cowen, B. Riley, Needham and other firms maintained positive ratings or raised price targets. Soros Capital also reportedly added AMAT among several semiconductor positions, reinforcing the longer-term AI and chip-cycle investment case. Soros Capital Loads Up on Semiconductor Stocks
• Neutral Sentiment: Options imply a possible rebound: Derivatives-market data indicates traders expect the pullback could be temporary, although elevated volatility reflects uncertainty over the stock’s near-term direction. Applied Materials Options Data
• Negative Sentiment: Expectations were exceptionally high: Despite the earnings beat and upbeat guidance, investors wanted faster growth and clearer evidence that AMAT is outpacing rivals in semiconductor manufacturing equipment. Concerns about competition, margins and the pace of systems growth overshadowed the headline results. Applied Materials Slips as Investors Seek Faster Growth
• Negative Sentiment: Broader market pressure added to selling: Weaker July retail-sales data, profit-taking after record highs and a semiconductor-sector selloff weighed on AMAT and other AI-related stocks.

Analysts Set New Price Targets

Several equities analysts have recently issued reports on the company. Wolfe Research boosted their price objective on Applied Materials from $500.00 to $550.00 and gave the stock an “outperform” rating in a research report on Friday, May 15th. Deutsche Bank Aktiengesellschaft reiterated a “buy” rating and issued a $605.00 target price on shares of Applied Materials in a report on Friday. Weiss Ratings reaffirmed a “buy (b-)” rating on shares of Applied Materials in a research report on Wednesday, June 24th. Zacks Research upgraded Applied Materials from a “hold” rating to a “strong-buy” rating in a research report on Wednesday, July 1st. Finally, JPMorgan Chase & Co. upped their price objective on shares of Applied Materials from $515.00 to $660.00 and gave the company an “overweight” rating in a research note on Friday. One investment analyst has rated the stock with a Strong Buy rating, twenty-seven have assigned a Buy rating and six have issued a Hold rating to the company’s stock. Based on data from MarketBeat.com, the stock has a consensus rating of “Moderate Buy” and a consensus price target of $640.17.

Insider Activity at Applied Materials

In other Applied Materials news, SVP Timothy M. Deane sold 8,621 shares of Applied Materials stock in a transaction that occurred on Monday, June 15th. The shares were sold at an average price of $590.76, for a total value of $5,092,941.96. Following the completion of the sale, the senior vice president directly owned 134,631 shares in the company, valued at $79,534,609.56. The trade was a 6.02% decrease in their ownership of the stock. The transaction was disclosed in a legal filing with the Securities & Exchange Commission, which is available through the SEC website. Also, SVP Omkaram Nalamasu sold 24,263 shares of the stock in a transaction 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 transaction, the senior vice president owned 146,916 shares in the company, valued at approximately $87,184,361.88. This trade represents a 14.17% decrease in their position. The disclosure for this sale is available in the SEC filing. Over the last three months, insiders sold 278,088 shares of company stock worth $169,654,805. 0.30% of the stock is currently owned by corporate insiders.

Hedge Funds Weigh In On Applied Materials

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

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.