Applied Materials reported revenue of approximately $9.12 billion for its fiscal third quarter ending July 26, 2026, marking a 25% increase year-over-year and surpassing analyst estimates [1, 2, 3, 4, 5, 6]. GAAP net income rose 42-43% to about $2.54 billion, while adjusted non-GAAP earnings per share (EPS) increased 41% to roughly $3.50, also beating expectations [1, 3, 6]. The company's semiconductor systems division led growth with revenue climbing about 30% to $7.04 billion, as demand accelerated for DRAM and advanced packaging products fueled by artificial intelligence workloads [1, 3, 6]. DRAM's share of semiconductor systems revenue rose to 26% from 22% the previous year, a sign of tightening the company's portfolio toward high-growth memory segments [1, 3, 6].
Applied Materials CEO Gary Dickerson said AI adoption is driving "unprecedented demand for our materials engineering solutions," enabling a raised 2026 semiconductor systems revenue outlook with expectations for 2027 to be another strong year [1]. CFO Brice Hill highlighted sustained robust demand through the second half of 2026, especially in DRAM, advanced logic wafer foundry, and advanced packaging, with customer visibility extending into 2030 [2].
The company now expects fourth-quarter 2026 revenue of $10.25 billion plus or minus $500 million, well above the Wall Street consensus of $9.54 billion [1, 2, 3, 4, 5, 6]. Adjusted EPS guidance for Q4 is set at $4.02 plus or minus $0.20, exceeding analyst expectations of roughly $3.69 to $3.72 [1, 2, 4, 5, 6]. GAAP gross margins improved to approximately 50.3%, marking 13 consecutive quarters of year-over-year margin expansion [3, 6].
Applied Materials is investing $500 million in a new manufacturing and research campus in Singapore to expand cleanroom capacity and aims to double semiconductor systems output per quarter by 2028, with further expansion planned by 2030 [1, 6]. The packaging business revenue growth forecast for 2026 was lifted to more than 70% from a previous estimate of over 50% [1, 2, 4, 5, 6].
Despite the strong earnings and raised guidance, shares fell more than 5% in after-hours trading as investors had priced in even higher expectations, with analysts noting that recent strong results at peers raised the bar for Applied Materials' results [1, 2, 3, 4, 5]. Stifel analyst Brian Chin commented that market expectations rose after peers posted solid reports [4]. CFRA's Brooks Idlet said the results were solid but insufficient to excite Wall Street, though momentum was improving, potentially leading to 2027 estimate upgrades if the trend continues [2].
The company returned about $860 million to shareholders through stock buybacks and dividends in Q3 [3, 6]. Applied Materials will report Q4 results in late October 2026.
