Applied Materials’ Record Revenue Rises 21% to $34.45 Billion in 2026
Key Facts
Applied Materials reported record results for fiscal 2026 on November 12, with revenue of $34.45 billion, up 21% year over year, reflecting strong demand for semiconductor manufacturing equipment. The company said fourth-quarter revenue was $10.41 billion, up 53% from the same period a year earlier. Its fiscal year ended October 25, 2026. In the same quarter, adjusted diluted earnings per share on a non-GAAP basis were $4.16, above analysts’ average estimate of $4.05. Management also forecast continued business strength, setting first-quarter revenue at $11.1 billion, plus or minus $500 million.
The quarterly increase was driven largely by the Semiconductor Systems segment, which posted revenue of $7.996 billion, compared with $4.879 billion in the same quarter of the previous fiscal year; its sales therefore rose by more than $3 billion. The company described segment revenue as about $8 billion, up nearly 64% year over year. The CEO said the company was on track to achieve growth of more than 40% in this segment’s revenue during calendar 2026. This outlook differs from the reported annual revenue growth because the segment forecast covers a calendar year, while the financial results cover the company’s fiscal year ending in October. Management tied continued momentum to rising incremental demand for semiconductors and said, "AI continues to fuel strong incremental demand for semiconductors."
Strong results also lifted annual profitability. The company reported GAAP diluted earnings per share of $12.62 and non-GAAP diluted earnings per share of $12.89. Full-year gross margin was 50.0% on a GAAP basis and 50.1% on a non-GAAP basis, up 130 basis points on both measures from the previous year. The results show growth extending beyond higher sales alone, with margins rising alongside revenue. In the fourth quarter, adjusted earnings per share were $4.16, above analysts’ estimate of $4.05. The company is targeting first-quarter non-GAAP diluted earnings per share of $4.35, plus or minus $0.20.
The quarterly guidance points to expectations above analysts’ level. Management set first-quarter fiscal 2027 revenue at $11.1 billion, with a potential range of plus or minus $500 million. The average analyst estimate, according to LSEG, was $10.89 billion, putting the midpoint of the company’s guidance above that average. The forecast follows record quarterly revenue of $10.41 billion in the fourth quarter. The company also set expected adjusted earnings per share at $4.35, within a range of plus or minus $0.20. Meeting the forecast depends on sustained demand supporting spending on chip-manufacturing equipment.
Management said demand for advanced semiconductors exceeds supply, and that major customers are providing rolling eight-quarter forecasts and requesting equipment earlier. It added that the CEO met with more than 250 senior executives from leading suppliers during 2026 to discuss readiness for capacity expansion. On the earnings call, the company forecast that demand for wafer-fabrication equipment would rise by more than 30% in 2027, making it another record year for both the market and the company. Over a longer horizon, it expects advanced logic, DRAM and advanced packaging together to account for about 75% of chip-equipment market growth through 2030. This shows the company’s bet on market expansion is not limited to immediate AI-related demand.
By contrast, China’s share of fourth-quarter revenue fell to 25%, from 29% in the comparable period a year earlier, despite sales there rising about 35% to $2.64 billion. Cash generated from operations in the quarter was $3.30 billion, and the company returned $2.42 billion to shareholders, including $2.00 billion in share repurchases and $421 million in dividends. It also announced the opening of its EPIC Center in Silicon Valley and the addition of four research and development partnerships, bringing the total number of announced partnerships to 15. The stock closed down 3.58% at $380.95 on November 12, before rising 0.5% after hours to $382.85. First-quarter guidance and expected 2027 demand remain the next milestones for assessing the company’s ability to sustain growth after record fiscal-year results.