Applied Materials (AMAT) Reports Record Revenue Up +25% in Fiscal Q3
Key Takeaways
- Applied Materials posted record revenue of $9.12 billion for its fiscal third quarter ended July 26, 2026, up 25% year over year and above the consensus estimate of about $8.99 billion.
- Non-GAAP EPS (earnings per share) reached a record $3.50, beating the roughly $3.40 consensus; GAAP EPS was $3.17.
- Gross margin expanded year over year for a 13th consecutive quarter, reaching 50.3% on a GAAP basis and 50.4% on a non-GAAP basis.
- Semiconductor Systems revenue climbed to $7.04 billion, while Applied Global Services revenue rose to $1.78 billion.
- Fiscal Q4 guidance of about $10.25 billion in revenue and $4.02 in non-GAAP EPS came in above Wall Street expectations.
- Despite the beat, shares pulled back roughly 3% in after-hours trading following a strong year-to-date rally.
Earnings Context and Why It Matters
Applied Materials (AMAT) is one of the world's leading semiconductor equipment makers, and its quarterly earnings offer a closely watched read on AI-driven chip industry spending. The fiscal third quarter ended July 26, 2026, arrived at a pivotal moment: cloud providers and chipmakers are expanding capacity for leading-edge logic, DRAM (dynamic random access memory), and advanced packaging, while investors have pushed chip-equipment stocks sharply higher. With Applied Materials shares up more than 100% year to date entering the report, the bar was unusually high. Beyond the headline results, investors were looking for signs that AI-related orders remain durable into calendar 2027. I also checked this using Tickeron’s AI Screener to see how the stock compares to others in the industry.
The Quarter in Detail
Applied Materials reported record revenue of $9.115 billion for its third quarter of fiscal 2026, up 25% from $7.302 billion in the year-earlier period. On a GAAP (Generally Accepted Accounting Principles) basis, gross margin was 50.3%, operating income was a record $3.08 billion, or 33.7% of revenue, and EPS was $3.17, up 43% year over year.
On a non-GAAP basis, which excludes certain acquisition-related and other items, gross margin was 50.4%, operating income was a record $3.10 billion, or 34.0% of revenue, and EPS was a record $3.50, up 41% from $2.48 a year ago. The non-GAAP EPS of $3.50 beat the FactSet consensus estimate of about $3.40, while revenue topped the roughly $8.99 billion consensus.
Semiconductor Systems revenue rose to $7.04 billion from $5.56 billion, with DRAM increasing to 26% of systems revenue from 22% a year earlier. Applied Global Services revenue grew to $1.78 billion from $1.46 billion. The company generated a record $3.04 billion in cash from operations and returned $860 million to shareholders through buybacks and dividends.
For the fiscal fourth quarter of 2026, Applied Materials guided to revenue of $10.25 billion, plus or minus $500 million, and non-GAAP EPS of $4.02, plus or minus $0.20. Both midpoints were above consensus estimates of roughly $9.5 billion in revenue and $3.65 to $3.71 in adjusted EPS.
Market Reaction and Investor Sentiment
Applied Materials shares slipped about 3% in after-hours trading following the report, even though results and guidance exceeded consensus. The move reflected a classic sell-the-news dynamic after a powerful rally that left the stock up more than 100% year to date. With elevated expectations already priced in, investors appeared to focus on near-term considerations such as margin ramp costs, display-related mix effects, and a modestly higher expected tax rate in 2027, rather than on the stronger demand outlook.
Forward Outlook and Key Factors to Monitor
Management meaningfully raised its calendar 2026 outlook. Applied Materials now expects Semiconductor Systems revenue growth to exceed 30%, up from a prior forecast of more than 20%. Advanced packaging revenue is expected to grow more than 70%, process diagnostics and control more than 50%, and Applied Global Services more than 20%. Management also said increased customer visibility supports another strong growth year in calendar 2027.
Several factors will shape the stock's path from here. Investors will be watching whether DRAM and high-bandwidth memory-related demand continues to accelerate, whether leading-edge foundry-logic orders stay broad-based, and how quickly new fab projects translate into equipment bookings. Applied Materials is doubling quarterly system manufacturing capacity by 2028 and added more than 1,500 employees in the quarter, which supports growth but may temporarily pressure margins as new hires and facilities ramp.
Other items to monitor include the pace of gross margin expansion, the mix impact of display revenue, and a higher expected global minimum tax burden in 2027. Trade and export-control policy remain important cross-currents for the entire semiconductor equipment industry, particularly given Applied Materials' substantial revenue exposure to Asia.
My Research Process with Tickeron Tools
When evaluating semiconductor names like AMAT, I frequently rely on Tickeron’s AI Screener. This tool helps me quickly filter stocks by industry, technical patterns, fundamentals, and AI-driven signals, making it easier to identify comparable opportunities and momentum within the sector without manual effort.
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Financial writer and active order flow futures trader with a focus on fundamental analysis, macroeconomic factors, and equity research. I make in-depth blogs on stocks and ETFs, bridging the gap between raw market data and real-world trading decisions.
AMAT's RSI Oscillator climbs out of oversold territory
The RSI Oscillator for AMAT moved out of oversold territory on September 17, 2026. This could be a sign that the stock is shifting from a downward trend to an upward trend. Traders may want to buy the stock or call options. The A.I.dvisor looked at 27 similar instances when the indicator left oversold territory. In 23 of the 27 cases the stock moved higher. This puts the odds of a move higher at 85%.
Technical Analysis (Indicators)
Bullish Trend Analysis
The Stochastic Oscillator shows that the ticker has stayed in the oversold zone for 3 days. The price of this ticker is presumed to bounce back soon, since the longer the ticker stays in the oversold zone, the more promptly an upward trend is expected.
The Momentum Indicator moved above the 0 level on September 18, 2026. You may want to consider a long position or call options on AMAT as a result. In 66 of 87 past instances where the momentum indicator moved above 0, the stock continued to climb. The odds of a continued upward trend are 76%.
Following a +7.03% 3-day Advance, the price is estimated to grow further. Considering data from situations where AMAT advanced for three days, in 252 of 320 cases, the price rose further within the following month. The odds of a continued upward trend are 79%.
Bearish Trend Analysis
The Moving Average Convergence Divergence Histogram (MACD) for AMAT turned negative on September 14, 2026. This could be a sign that the stock is set to turn lower in the coming weeks. Traders may want to sell the stock or buy put options. Tickeron's A.I.dvisor looked at 45 similar instances when the indicator turned negative. In 28 of the 45 cases the stock turned lower in the days that followed. This puts the odds of success at 62%.
Following a 3-day decline, the stock is projected to fall further. Considering past instances where AMAT declined for three days, the price rose further in 50 of 62 cases within the following month. The odds of a continued downward trend are 65%.
The Aroon Indicator for AMAT entered a downward trend on September 18, 2026. This could indicate a strong downward move is ahead for the stock. Traders may want to consider selling the stock or buying put options.
Fundamental Analysis (Ratings)
The Tickeron PE Growth Rating for this company is 9 (best 1 - 100 worst), pointing to outstanding earnings growth. The PE Growth rating is based on a comparative analysis of stock PE ratio increase over the last 12 months compared against S&P 500 index constituents.
The Tickeron SMR rating for this company is 25 (best 1 - 100 worst), indicating very strong sales and a profitable business model. SMR (Sales, Margin, Return on Equity) rating is based on comparative analysis of weighted Sales, Income Margin and Return on Equity values compared against S&P 500 index constituents. The weighted SMR value is a proprietary formula developed by Tickeron and represents an overall profitability measure for a stock.
The Tickeron Price Growth Rating for this company is 43 (best 1 - 100 worst), indicating steady price growth. AMAT’s price grows at a higher rate over the last 12 months as compared to S&P 500 index constituents.
The Tickeron Profit vs. Risk Rating rating for this company is 45 (best 1 - 100 worst), indicating well-balanced risk and returns. The average Profit vs. Risk Rating rating for the industry is 64, placing this stock slightly better than average.
The Tickeron Valuation Rating of 67 (best 1 - 100 worst) indicates that the company is slightly overvalued in the industry. This rating compares market capitalization estimated by our proprietary formula with the current market capitalization. This rating is based on the following metrics, as compared to industry averages: P/B Ratio (13.774) is normal, around the industry mean (7.599). P/E Ratio (38.358) is within average values for comparable stocks, (153.531). Projected Growth (PEG Ratio) (0.884) is also within normal values, averaging (0.796). Dividend Yield (0.004) settles around the average of (0.002) among similar stocks. P/S Ratio (10.764) is also within normal values, averaging (27.897).
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a manufacturer of equipment and software for the semiconductor industries
Industry ElectronicProductionEquipment
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