Applied Materials delivered record fiscal third-quarter revenue of $9.12 billion, a 25% increase from the year-earlier period and above the $8.99 billion consensus estimate. Non-GAAP earnings reached $3.50 per share, beating the $3.40 FactSet average, while GAAP EPS came in at $3.17. Gross margin expanded to 50.4% on a non-GAAP basis.
Semiconductor Systems revenue, the company’s largest segment, rose to $7.04 billion. Management cited continued strength in leading-edge foundry-logic, DRAM and advanced packaging driven by artificial-intelligence chip demand. The company also generated record cash from operations of $3.04 billion and returned $860 million to shareholders through repurchases and dividends.
For the fourth quarter, Applied Materials projected revenue of $10.25 billion, plus or minus $500 million, and non-GAAP EPS of $4.02, plus or minus 20 cents—both comfortably above prior analyst forecasts. CEO Gary Dickerson said the firm is raising its calendar-2026 Semiconductor Systems revenue expectations and expects another strong growth year in 2027 as customer visibility extends further out.
Despite the beat-and-raise combination, shares declined in premarket and early trading as investors had already priced in robust AI-related capital spending. The reaction highlights how high the bar has become for semiconductor-equipment suppliers. Longer-term, the company continues to expand manufacturing capacity and R&D partnerships to support projected demand through the end of the decade.
Applied Materials remains a pure-play beneficiary of the multi-year buildout in advanced chip production. The latest results reinforce that AI infrastructure spending is still accelerating, even if near-term multiple expansion is constrained by already-elevated valuations across the sector.