Applied Materials reports record revenue driven by AI chip demand
Applied Materials posts record Q4 revenue of USD 10.41 billion
Applied Materials announced a record revenue of USD 10.41 billion for the fourth quarter of fiscal year 2026, marking a 53 percent increase from the previous year. This growth is attributed to heightened demand for advanced semiconductor manufacturing equipment, particularly in AI computing infrastructure. The company reported a GAAP operating income of USD 3.66 billion, resulting in a 35.1 percent operating margin, with GAAP earnings of USD 3.40 per diluted share. Non-GAAP earnings reached USD 4.16 per share, a 92 percent increase year over year.
Semiconductor Systems division drives significant revenue growth
The Semiconductor Systems division generated USD 8.00 billion in revenue, reflecting a 64 percent increase compared to the same quarter last year. This segment’s growth was largely fueled by strong demand for DRAM equipment, which accounted for 33 percent of the segment’s revenue. The company also reported USD 1.90 billion in revenue from Applied Global Services, a 26 percent increase from the previous year. For the full fiscal year, Applied Materials achieved total revenue of USD 34.45 billion, a 21 percent increase, with GAAP earnings of USD 12.62 per share.
Looking ahead, Applied Materials forecasts revenue for the first quarter of fiscal 2027 to be around USD 11.1 billion, plus or minus USD 500 million, and adjusted earnings per share of approximately USD 4.35, plus or minus USD 0.20. The company expects its Semiconductor Systems business to grow by over 40 percent during calendar year 2026.
Partnerships to enhance semiconductor technology development
Applied Materials is expanding its semiconductor research and development through the new EPIC Center in Silicon Valley, collaborating with companies like Intel and Kioxia. These partnerships aim to address manufacturing challenges in semiconductor technology, particularly as AI chip architectures become more complex. The company is also planning to increase its investment in Besi, a move that aligns its equipment strategy with advanced semiconductor assembly technologies.
The financial results highlight the importance of distinguishing between GAAP and adjusted earnings, with non-GAAP earnings per share surpassing GAAP figures due to significant adjustments for unrealized losses on strategic investments. The company’s shares rose by about 3 percent in after-hours trading following the earnings announcement, reflecting positive market reception to its strong quarterly guidance.
