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

Applied Materials (NASDAQ:AMAT) issued its quarterly earnings data on Thursday. The manufacturing equipment provider reported $3.50 EPS for the quarter, topping the consensus estimate of $3.40 by $0.10, FiscalAI reports. The company had revenue of $9.12 billion during the quarter, compared to analyst estimates of $8.99 billion. Applied Materials had a return on equity of 36.97% and a net margin of 29.31%.Applied Materials’s revenue was up 24.8% on a year-over-year basis. During the same quarter in the previous year, the firm earned $2.48 earnings per share. 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 4.7%

Shares of NASDAQ:AMAT traded down $25.31 during midday trading on Friday, reaching $509.23. The company’s stock had a trading volume of 4,164,252 shares, compared to its average volume of 8,187,103. Applied Materials has a 12-month low of $154.46 and a 12-month high of $739.67. The company has a quick ratio of 1.80, a current ratio of 2.51 and a debt-to-equity ratio of 0.22. The firm has a 50 day moving average of $563.06 and a 200-day moving average of $444.45. The firm has a market capitalization of $404.31 billion, a P/E ratio of 47.93, a PEG ratio of 1.38 and a beta of 1.61.

Applied Materials Announces Dividend

The firm also recently announced 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 is Thursday, August 20th. Applied Materials’s payout ratio is 19.91%.

Insider Buying and Selling

In related news, insider Prabu G. Raja sold 10,000 shares of the firm’s stock in a transaction that occurred on 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 transaction, the insider owned 346,642 shares of the company’s stock, valued at $219,608,106.26. This trade represents a 2.80% decrease in their position. The transaction was disclosed in a filing with the Securities & Exchange Commission, which is available at this hyperlink. Also, SVP Omkaram Nalamasu sold 24,263 shares of the business’s stock in a transaction on Tuesday, June 16th. The stock was sold at an average price of $593.43, for a total value of $14,398,392.09. Following the completion of the sale, the senior vice president directly owned 146,916 shares in the company, valued at $87,184,361.88. This trade represents a 14.17% decrease in their ownership of the stock. Additional details regarding this sale are available in the official SEC disclosure. Insiders have sold a total of 278,088 shares of company stock worth $169,654,805 over the last three months. Corporate insiders own 0.30% of the company’s stock.

Institutional Inflows and Outflows

Several hedge funds have recently modified their holdings of AMAT. Compound Planning Inc. boosted its position in shares of Applied Materials by 15.5% during the fourth quarter. Compound Planning Inc. now owns 10,757 shares of the manufacturing equipment provider’s stock valued at $2,764,000 after buying an additional 1,440 shares during the last quarter. Rare Wolf Capital LLC purchased a new position in shares of Applied Materials during the 4th quarter valued at about $255,000. Strive Financial Group LLC bought a new position in shares of Applied Materials during the 4th quarter valued at approximately $407,000. First Commonwealth Financial Corp PA raised its stake in Applied Materials by 5.6% during the 4th quarter. First Commonwealth Financial Corp PA now owns 6,089 shares of the manufacturing equipment provider’s stock worth $1,565,000 after acquiring an additional 321 shares during the period. Finally, Blue Sparrow LLC DE purchased a new position in Applied Materials during the fourth quarter valued at approximately $30,711,000. Hedge funds and other institutional investors own 80.56% of the company’s stock.

Wall Street Analysts Forecast Growth

AMAT has been the subject of a number of research reports. Morgan Stanley boosted their price target on shares of Applied Materials from $502.00 to $647.00 and gave the stock an “equal weight” rating in a research note on Monday, July 6th. HC Wainwright set a $850.00 price objective on shares of Applied Materials in a report on Monday, June 29th. Citigroup reaffirmed a “buy” rating on shares of Applied Materials in a research note on Monday, August 3rd. Susquehanna upped their price objective on Applied Materials from $575.00 to $900.00 and gave the stock a “positive” rating in a report on Tuesday, June 30th. Finally, Truist Financial set a $575.00 price objective on Applied Materials in a research report on Thursday, May 28th. One investment analyst has rated the stock with a Strong Buy rating, twenty-six have issued a Buy rating and eight have issued a Hold rating to the company’s stock. Based on data from MarketBeat.com, Applied Materials presently has a consensus rating of “Moderate Buy” and a consensus price target of $607.42.

Trending Headlines about Applied Materials

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

• Positive Sentiment: Applied Materials reported record quarterly revenue of approximately $9.12 billion, up 24.8% year over year, while adjusted earnings of $3.50 per share exceeded the $3.40 consensus estimate. Gross margin reached a record 50.4%, supported by strong demand for equipment used in AI infrastructure and advanced chips. Applied Materials Announces Third Quarter 2026 Results
• Positive Sentiment: Management issued better-than-expected fourth-quarter guidance, projecting revenue of $9.8 billion to $10.8 billion versus a $9.5 billion consensus forecast, and EPS of $3.82 to $4.22 versus expectations of $3.65. Executives also indicated that AI-related demand provides unusually strong visibility into another potential record year in 2027. Applied Materials forecasts quarterly revenue above estimates
• Positive Sentiment: Needham reaffirmed its buy rating and set a $740 price target, implying significant upside from the reference price. Analysts continue to view Applied Materials as a key beneficiary of semiconductor manufacturers’ AI-related capital spending. Needham rating update
• Neutral Sentiment: Investors are likely to monitor equipment orders, DRAM and advanced-packaging demand, China exposure, and whether AI-related capital expenditures remain durable over the next several quarters. These metrics may determine whether the pullback is temporary or signals a broader semiconductor-cycle concern. Key metrics after earnings
• Negative Sentiment: Despite the earnings and guidance beats, shares fell because results did not clear an exceptionally high bar following a sharp rally. Investors questioned whether Applied Materials is growing faster than competitors and remain alert to intensifying competition, potential margin pressure, and a possible peak in the semiconductor capital-spending cycle. Applied Materials slips as investors seek faster growth

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.