Our Take: Applied Materials Stock After a Record Q4 and a Strong Outlook

By Tech & Money Press · Our Take on Applied Materials Q4 fiscal 2026 earnings · November 13, 2026

Applied Materials makes the machines that make chips, so its results are a read on how much chipmakers are spending. The answer this quarter: a lot. The company posted record revenue, beat estimates and guided above Wall Street for the next quarter, citing AI demand.

The stock reaction has been muted so far. Applied Materials (AMAT) closed Thursday at $380.95, down about 3.6% on the day before the report, and was quoted at about $383.10 in premarket trading at 6:55 a.m. ET Friday, up about 0.6%, according to Webull data. Benzinga reported the shares traded as high as $389 after hours on Thursday before pulling back.

What Applied Materials reported

For the fiscal fourth quarter ended Oct. 25, the company reported, per its press release:

• Revenue: a record $10.41 billion, up 53% from a year earlier. Benzinga cited an estimate of $10.30 billion.
• Adjusted EPS: a record $4.16, up 92%, versus $4.05 expected, according to Reuters, citing LSEG data. GAAP EPS was $3.40.
• Gross margin: 50.6% adjusted, up 2.5 percentage points from a year earlier.
• Semiconductor Systems revenue: $8.0 billion, up 64%. That is the equipment business.
• Applied Global Services revenue: $1.9 billion, up 26%. That is service and spare parts.

For the full fiscal year, revenue reached a record $34.45 billion, up 21%.

The company generated $3.30 billion in operating cash flow and returned $2.42 billion to shareholders through buybacks and dividends in the quarter, Benzinga reported.

The memory shift

The most interesting detail is where the equipment demand is coming from. Within Semiconductor Systems, DRAM made up 33% of revenue, up from 28% a year earlier, according to the press release. Foundry and logic fell to 58% from 66%, and flash memory rose to 9% from 6%.

That fits the AI story. AI accelerators need large amounts of high-bandwidth memory, and memory makers are adding capacity. On the earnings call, management said it posted record revenue in both DRAM and advanced packaging, per the transcript published by The Motley Fool.

China is the other piece. Reuters reported that China was 25% of fourth-quarter revenue, down from 29% a year earlier, although sales there still rose about 35% to $2.64 billion. In other words, China is growing, just more slowly than the rest of the business.

The outlook

Applied Materials guided fiscal first-quarter revenue to about $11.1 billion, plus or minus $500 million. Analysts expected $10.89 billion, according to LSEG data cited by Reuters. It expects adjusted EPS of $4.15 to $4.55, versus $4.26 expected, Benzinga reported.

The bigger statement was about next year. “We expect 2027 to be another record year for the market and Applied,” CEO Gary Dickerson said on the call, according to Reuters. He said wafer fab equipment demand should rise more than 30% and that customers are asking for tools sooner, not later.

Our Take

We think this report answers the question in our earnings preview: AI spending is still flowing down to the equipment makers. Revenue growth of 53%, margins that are rising rather than falling, and a call for 30%-plus equipment growth in 2027 all point the same way.

It is a useful contrast with Cisco, which also reported Thursday. Cisco’s AI hardware sales are growing fast but squeezing its margins. Applied’s margins expanded, which suggests it has more pricing power in its corner of the supply chain.

So why the flat reaction? Expectations were already high. Reuters said the stock had risen about 48% this year. The shares have also been volatile this fall: by our math, Thursday’s close was about 30% below the Oct. 2 high on the chart. We covered one of those slides in October, when the equipment outlook was in doubt.

Our view is that the debate around chip equipment has shifted from “is demand there?” to “how long does it last?” A 30%-plus WFE call is a strong claim, and it depends on memory makers and foundries keeping their spending plans. The two lines we would watch next quarter are DRAM’s share of revenue and China’s share.

The levels on the chart

Based on Webull data, these are the reference points on the daily chart:

• $547.25: the Oct. 2 intraday high, the top of the chart window.
• $380.95: Thursday’s close, before the earnings release.
• $316.95: the Nov. 5 intraday low, the lowest point in the chart window.

Premarket quotes are thin and can change before the 9:30 a.m. ET open.

Key takeaways

• Q4 revenue was a record $10.41 billion, up 53%; adjusted EPS was $4.16 versus $4.05 expected (Applied Materials, Reuters/LSEG).
• DRAM rose to 33% of equipment revenue from 28% (Applied Materials).
• China was 25% of revenue, down from 29%, even as China sales rose about 35% (Reuters).
• Q1 revenue guidance of about $11.1 billion topped the $10.89 billion estimate (Reuters/LSEG).
• The CEO expects wafer fab equipment demand to rise more than 30% in 2027 (Reuters).
• AMAT was quoted at about $383.10 premarket at 6:55 a.m. ET Friday, up about 0.6% from $380.95 (Webull).

Disclaimer: For news and education only. Not financial advice. Tech & Money Press is not a registered investment advisor. Trading stocks involves risk, including the loss of your investment. Do your own research and consult a licensed professional before making any investment decisions.

Sources: Applied Materials: Fourth Quarter and Fiscal Year 2026 Results, Nov. 12, 2026. Reuters via Investing.com: Applied Materials forecasts quarterly revenue above estimates on strong AI chip demand, Nov. 12, 2026. Benzinga: Applied Materials reports Q4 earnings, raises guidance as AI drives strong chip demand, Nov. 12, 2026. The Motley Fool: Applied Materials Q4 2026 earnings call transcript. AMAT daily prices and premarket quote (6:55 a.m. ET, Nov. 13): Webull.

Featured image: Chips on a circuit board. Photo: jplenio / Pixabay.