Markets AMAT AUG 15, 2026

Applied Materials posts record $9.12B Q3 revenue, lifts 2026 chip-equipment growth outlook above 30% — AMAT slips 5% after hours

Q4 revenue guide of $10.25B blew past the $9.55B Street consensus, but investors focused on flat gross margins and rising opex.

BY HENLEY MARRAST · MARKETS DESK

Applied Materials booked a record $9.12 billion in fiscal Q3 revenue, beat the $8.99 billion Street consensus, raised its calendar 2026 chip-equipment growth outlook above 30%, and promptly watched its stock fall roughly 5% after hours to $506.51 from a regular-session close of $534.54. The gap between the print and the reaction is the story.

Revenue grew 25% year over year and 15% sequentially. Non-GAAP EPS of $3.50 came in 41% higher than a year earlier, ahead of the $3.40 consensus. Semiconductor Systems, the segment closest to the AI capex cycle, delivered $7.04 billion against $5.56 billion in the year-ago quarter. Applied Global Services rose to $1.78 billion from $1.46 billion. GAAP operating income hit a record $3.08 billion, or 33.7% of revenue. Cash from operations was a record $3.04 billion, and the company returned $860 million to shareholders through $440 million in buybacks and $420 million in dividends.

CEO Gary Dickerson framed the quarter around what he called the “rapid global adoption of AI drives unprecedented demand.” CFO Brice Hill’s outlook did the actual analytical work. The calendar 2026 Semiconductor Systems growth guide moved from “greater than 20%” to above 30%, the second upward revision this year. Applied says roughly 80% of WFE growth in 2026 and 2027 will come from leading-edge foundry/logic, DRAM, and advanced packaging. Process diagnostics and control is guided to grow more than 50% for the year; services more than 20%. The AIx software platform now spans over 37,000 connected chambers. Capacity is being built to double quarterly Semiconductor Systems volume by 2028, with groundwork extending through 2030.

So why the selloff?

The Q4 revenue guide of approximately $10.25 billion, plus or minus $500 million, blew past $9.55 billion Street consensus, and $4.02 EPS guidance topped the $3.71 expectation. But Q4 non-GAAP gross margin is guided flat at 50.4%, and non-GAAP opex is climbing to roughly $1.58 billion. In a cycle priced for operating leverage, flat margins and rising costs are the tell that matters. Investors read the buildout timeline through 2030 and concluded the capex is Applied’s, not just its customers’.

Sources

About the author

Henley Marrast

MARKETS DESK

Henley Marrast covers AI-equity flow, accelerator demand, and earnings prints for AI Sheet Report. She leads coverage of the public AI complex from the New York markets desk, with a focus on the daily tape and quarterly results. She has been writing about technology markets for several years.