Applied Materials Earnings: Revenue Up 53%, $11.1B Guide

Applied Materials earnings beat on every headline line: fiscal fourth-quarter revenue hit a record $10.41 billion, up 53%, and adjusted EPS jumped 92% to $4.16, against forecasts of $10.30 billion and $4.06. The chip-equipment maker guided first-quarter revenue to $11.1 billion, plus or minus $500 million. Yet the stock closed November 12 at $380.95, roughly 48% below its June record.

Key takeaways

• Q4 revenue rose 53% to a record $10.41 billion; DRAM reached 33% of equipment sales.
• Q1 fiscal 2027 guidance: $11.1 billion revenue and $4.35 adjusted EPS at the midpoint.
• China slipped to 25% of quarterly revenue from 29% a year earlier.

How did Applied Materials earnings compare with forecasts?

Applied Materials beat both lines, but not by much. Revenue of $10.41 billion topped the $10.30 billion consensus by about 1%, and adjusted EPS of $4.16 beat $4.06 by about 2.5%, according to Investing.com’s call summary. The size of the business, not the size of the beat, is the story.

The company’s release shows revenue up from $6.80 billion a year earlier and up 14% from the prior quarter. Adjusted operating margin reached a record 35.3%, up from 28.6%.

For the full fiscal year, which ended October 25, revenue grew 21% to $34.45 billion and adjusted EPS rose 37% to $12.89. Growth clearly accelerated as the year went on.

Metric	Q4 FY2026	Q4 FY2025	Change
Revenue	$10.41B	$6.80B	+53%
Semiconductor Systems revenue	$8.00B	$4.88B	+64%
Applied Global Services revenue	$1.90B	$1.51B	+26%
Non-GAAP gross margin	50.6%	48.1%	+2.5 pts
Non-GAAP EPS	$4.16	$2.17	+92%
GAAP EPS	$3.40	$2.38	+43%
Free cash flow	$2.62B	$2.04B	+28%
China share of revenue	25%	29%	-4 pts

What drove the 53% revenue jump?

AI chips drove it, specifically the memory and packaging that sit around them. Semiconductor Systems revenue climbed 64% to $8.00 billion, with record sales in Korea and Taiwan. Management said leading-edge logic and DRAM fabs are running at full utilization and customers want tools faster, not later.

DRAM and advanced packaging took the lead

DRAM made up 33% of equipment revenue in the quarter, up from 28% a year earlier, the release shows. Foundry and logic fell to 58% from 66%. That mix shift follows high-bandwidth memory, which every AI accelerator needs in bulk.

On the call, CEO Gary Dickerson said advanced packaging revenue should rise about 90% in calendar 2026, and inspection and metrology more than 50%. He added that Applied serves about 80% of the process steps in hybrid bonding.

Services hit a new level

Applied Global Services, the service and spares unit, grew 26% to $1.90 billion. The company expects about $2.0 billion next quarter, its first at that level. Service revenue is stickier than tool sales, which matters if the equipment cycle cools.

What is Applied Materials guiding for next quarter?

Applied guided first-quarter fiscal 2027 revenue to $11.1 billion, plus or minus $500 million, and adjusted EPS to $4.35, plus or minus $0.20. At the midpoint, that is 58% revenue growth and 83% EPS growth year over year. Benzinga reported the Street had expected about $10.89 billion and $4.26.

One caveat: the quarter has 14 weeks instead of 13, which CFO Brice Hill said flatters services revenue. Here is what the company laid out for the quarter and beyond:

• Semiconductor Systems revenue of about $8.7 billion, up 69% year over year.
• Adjusted gross margin of about 50.8%, up 170 basis points year over year.
• Wafer fab equipment spending up more than 30% in 2027, management’s current view.
• Capacity to double systems output from Q4 2026 levels by 2028, and more than double manufacturing and lab capacity by 2030.

Hill also said cloud capital spending is expected to rise more than 50% in 2027 to well over $1 trillion. That is the demand assumption under every number above.

Why is Applied Materials stock still far below its high?

Because investors doubt the AI spending cycle more than they doubt Applied. Shares fell 3.58% in the regular session on November 12 to $380.95, then rose only 0.5% after hours, Investing.com reported. The 52-week high is $739.67. Record results did not erase that gap.

The week explains part of it. Chip stocks have been hit by a selloff we tracked in our weekly AI money roundup, and Nvidia’s leadership shake-up added more doubt, as covered in our Nvidia CEO succession report.

Three numbers worth a second look

First, the GAAP gap. GAAP EPS was $3.40, not $4.16. The biggest adjustment was a $653 million unrealized loss on strategic investments, worth $0.68 a share, which the company excludes from adjusted results.

Second, receivables. Accounts receivable reached $9.00 billion, up 74% from $5.19 billion a year earlier, faster than the 53% revenue growth. That can simply reflect late-quarter shipments, but it means cash lags reported sales.

Third, supply. Hill said Q1 revenue would be slightly higher if parts were fully available, and that cleanroom space caps how much equipment the industry can install. Growth is now limited by construction, not orders.

On valuation, our own rough math: four quarters at the $4.35 midpoint equal $17.40 a share, or about 22 times the November 12 close. That multiple assumes the guide holds through 2027.

Why this matters

Applied sits upstream of every AI chip. When it says customers are asking to pull deliveries forward, that is a read on fab plans for 2027 and beyond, not just one quarter. Management said its tracker added more than 10 fab projects for a third straight quarter, many opening in 2029 and 2030.

China is the swing factor. It fell to 25% of quarterly revenue, from 29%, and Hill said it will likely stay below 25% in 2027. Less China dependence lowers export-control risk but removes a growth engine that carried 2024 and 2025.

For fund holders, Applied is a top name in chip ETFs, so its guide feeds straight into the debate in our SMH vs SOXX comparison. It also lines up with what AMD said about data-center demand in its latest earnings.

This article is for information only and is not financial advice.

What to watch next

• November 17, 2026: Nvidia reports fiscal third-quarter results, per its conference call notice. Its outlook is the main test of the AI capex story Applied is selling.
• November 19, 2026: record date for Applied’s $0.53 quarterly dividend, payable December 10, 2026.
• Ongoing signals: supplier pinch points, cleanroom delays, China’s revenue share and whether receivables convert to cash next quarter.

FAQ

What were Applied Materials’ Q4 fiscal 2026 earnings?

Revenue was a record $10.41 billion, up 53%. Adjusted EPS was $4.16, up 92%, and GAAP EPS was $3.40, up 43%.

What is Applied Materials’ guidance for Q1 fiscal 2027?

Revenue of $11.1 billion, plus or minus $500 million, and adjusted EPS of $4.35, plus or minus $0.20. The quarter has 14 weeks.

How much of Applied Materials’ revenue comes from China?

China was $2.64 billion, or 25% of Q4 revenue, down from 29% a year earlier. Management expects it below 25% in 2027.

Why was GAAP EPS lower than adjusted EPS?

Mainly a $653 million unrealized loss on strategic investments, worth $0.68 a share, which adjusted results exclude.

How much cash did Applied Materials return to shareholders?

$2.42 billion in Q4: $2.00 billion in buybacks and $421 million in dividends. About $10.8 billion of buyback authorization remains.

Is Applied Materials stock a buy after earnings?

We do not give investment advice. The results were strong, but the stock’s path depends on AI capital spending holding up through 2027.

The bottom line

Applied Materials just printed the best quarter in its history and guided higher. The operating case is not in question; the cycle is. Expect the stock to trade on Nvidia’s November 17 outlook and on any sign that cleanroom or parts shortages cap 2027 shipments. If the $11.1 billion guide lands and receivables turn into cash, the 48% discount to the June high looks hard to justify. If cloud capex wobbles, record quarters will not save it.

Sources

• Applied Materials: Fourth Quarter and Fiscal Year 2026 Results (Nov 12, 2026)
• SEC Form 8-K, Exhibit 99.1 (Applied Materials)
• Investing.com: Applied Materials Q4 2026 earnings call transcript
• Benzinga: Applied Materials reports Q4 earnings, raises guidance
• Applied Materials: Cash dividend announcement (Sept 10, 2026)
• Nvidia: Third-quarter conference call notice (Oct 28, 2026)

Wealth Engine researches and drafts with AI tools and checks every figure against the sources above. How we report.