Applied Materials posts impressive 53% jump in revenue as it beats expectations again

Semiconductor industry giant Applied Materials Inc. chalked up another strong quarter as it continued to cash in on the artificial intelligence boom, delivering fourth-quarter results that surpassed Wall Street’s expectations on earnings and revenue.

The company reported adjusted earnings of $4.16 per share on revenue of $10.41 billion, up by an impressive 53% from a year earlier. The results were impressive, with analysts modeling earnings of just $4.06 per share on sales of $10.3 billion. Net income rose to $2.71 billion, up from $1.89 billion in the same period one year ago.

Applied Materials is the world’s biggest supplier of the equipment used by semiconductor manufacturers such as Taiwan Semiconductor Manufacturing Co. Ltd., Samsung Electronics Co. Ltd. and Micron Technology Inc., so its results are widely seen as a bellwether for the broader chipmaking industry. If Applied is growing, it means chipmakers are investing in their factories and presumably expecting to churn out more chips, driving growth in the industry. The company manufactures all sorts of machines to support different semiconductor manufacturing processes, catering to the most advanced silicon for AI workloads.

Chief Executive Gary Dickerson (pictured) said the company delivered record-breaking results in fiscal 2026, with full-year sales rising 21% from the prior year, to $34.31 billion. He also said the semiconductor systems business unit is on track to grow more than 40% in calendar 2026. “AI continues to fuel strong incremental demand for semiconductors and Applied has the most-enabling portfolio to advance the AI computing roadmap, putting us in a great position for multiyear revenue and profit growth,” he added.

Applied’s stock was under pressure earlier in the day following the news of Nvidia Corp. CEO Jensen Huang’s resignation, which came after he admitted to having an affair with a woman who is believed to be working for China’s intelligence services. Some investors worry that instability at Nvidia, which is the world’s most dominant AI chip supplier, could have a knock-on effect on the broader chipmaking industry.

However, the strong results brought Applied’s daytime slide to a halt, and the stock gained more than 2.5% in late trading. In the year to date, its stock is up 48%.

Applied’s main business, the semiconductor systems unit, saw revenue jump from $4.88 billion in the year-ago period to $7.99 billion. Meanwhile, sales from the smaller applied global services segment rose from $1.5 billion a year earlier, to $1.89 billion.

For the current quarter, Applied said it’s looking for earnings of $4.35 per share at the midpoint of its guidance range, with revenue coming to $11.1 billion. Those numbers were better than expected too, with the Street modeling first quarter earnings of just $4.24 per share on sales of $10.85 billion.

During the quarter, Applied made a big splash when it said it’s going to invest $5 billion in a new chip research and development facility located in Silicon Valley. It’s called the EPIC Center, and it will act as a shared R&D center for chipmakers to collaborate on new process manufacturing technologies.

Initial partners include Intel Corp., which is working with Applied and other companies on the development of next-generation transistors, interconnects and advanced packaging technologies. Other founding partners include Kioxia Corp., BE Semiconductor Industries N.V. and the UCLA Samueli School of Engineering.

Photo: Applied Materials