Applied Materials has reported the strongest quarter in its history, with revenue jumping 53 per cent as makers of memory chips and advanced packaging race to expand capacity for artificial intelligence.
The company, which supplies the machines used to make semiconductors, said revenue for its fiscal fourth quarter reached a record $10.41 billion, up from $6.80 billion a year earlier and ahead of the roughly $10.30 billion Wall Street had expected. Adjusted earnings per share rose 92 per cent to a record $4.16, beating forecasts of about $4.06, while net income climbed 43 per cent to $2.72 billion.
The results, published on Thursday, underline how the AI boom is spreading beyond the chip designers whose names dominate headlines and into the equipment makers that supply the factories. Applied Materials’ Semiconductor Systems division, which sells the tools used to etch, deposit and inspect chips, generated $8.0 billion of revenue in the quarter, up 64 per cent year on year, with record sales in South Korea and Taiwan.
Demand for memory was the standout driver. Sales of equipment for making DRAM, the memory chips used in AI servers, reached an all-time high and accounted for a third of the division’s revenue, as customers accelerated investment in high-bandwidth memory and advanced packaging. The company’s services business also set a record, with revenue of $1.90 billion, up 26 per cent.
For the full fiscal year, revenue rose 21 per cent to a record $34.45 billion, with adjusted earnings per share up 37 per cent to $12.89 — the company’s seventh consecutive year of growth.
Applied Materials also struck a confident note about the year ahead. It forecast revenue of about $11.1 billion for the current quarter, plus or minus $500 million, and adjusted earnings of about $4.35 a share — both above analysts’ expectations. Chief executive Gary Dickerson said the company was on track to grow its Semiconductor Systems business by more than 40 per cent in calendar 2026 and issued its first explicit call for wafer fab equipment spending to grow by more than 30 per cent in 2027.
The strength comes with a caveat investors will watch closely. China accounted for 25 per cent of fourth-quarter revenue, or $2.64 billion, down from 29 per cent a year earlier, as export controls and shifting demand reshape where chipmaking equipment is sold. Applied Materials also recorded a $653 million unrealised loss on strategic investments, which held back its reported GAAP earnings of $3.40 a share.
Even so, the company generated record operating cash flow of $3.30 billion in the quarter and returned $2.0 billion to shareholders through share buybacks, signalling confidence that the AI equipment cycle has further to run.
Sources: Applied Materials, “Applied Materials Announces Fourth Quarter and Fiscal Year 2026 Results” (SEC filing), https://www.sec.gov/Archives/edgar/data/6951/000162828026073360/exhibit991q42026earningsre.htm ; Zacks, “AMAT Q4 Earnings Beat on Record Semiconductor Systems Sales”, https://www.zacks.com/stock/news/3029568/amat-q4-earnings-beat-on-record-semiconductor-systems-sales
