Applied Materials (NASDAQ:AMAT) Posts Earnings Results, Beats Estimates By $0.18 EPS

Key Points

• Applied Materials beat expectations for Q2 fiscal 2026, posting earnings of $2.86 per share on revenue of $7.91 billion, both above analyst estimates. Revenue rose 11.4% year over year and the company reported record quarterly results.
• Management said AI-related demand is accelerating and now expects the semiconductor equipment business to grow more than 30% in calendar 2026. The company also sees strong visibility into 2027 and beyond.
• Applied Materials issued strong Q3 guidance, forecasting revenue of $8.95 billion and non-GAAP EPS of $3.36, while also raising its quarterly dividend from $0.46 to $0.53 per share.

Applied Materials (NASDAQ:AMAT - Get Free Report) posted its quarterly earnings data on Thursday. The manufacturing equipment provider reported $2.86 earnings per share for the quarter, topping analysts' consensus estimates of $2.68 by $0.18, Zacks reports. Applied Materials had a return on equity of 37.52% and a net margin of 27.78%.The company had revenue of $7.91 billion during the quarter, compared to analysts' expectations of $7.68 billion. During the same period last year, the firm earned $2.39 EPS. The firm's revenue for the quarter was up 11.4% on a year-over-year basis. Applied Materials updated its Q3 2026 guidance to 3.160-3.560 EPS.

Here are the key takeaways from Applied Materials' conference call:

• Applied Materials reported record Q2 fiscal 2026 revenue and earnings, with revenue of $7.91 billion and non-GAAP EPS of $2.86, while gross margin reached a more-than-25-year high of 50%.
• Management said AI demand is accelerating and diversifying, and now expects the semiconductor equipment business to grow more than 30% in calendar 2026, with strong visibility extending into 2027 and beyond.
• The company highlighted strong leadership in the highest-growth areas of the market, especially leading-edge foundry logic, DRAM, and advanced packaging, which it expects to account for more than 80% of WFE spending growth in 2026 and a similar mix in 2027.
• Applied raised its outlook for Applied Global Services, saying the business should grow at a mid-teens annual rate over time and potentially higher this year as installed base growth, higher utilization, and AI-enabled service tools lift demand.
• Q3 guidance was strong, with company revenue expected at $8.95 billion and non-GAAP EPS at $3.36, both implying significant year-over-year growth and continued margin expansion.

Applied Materials Trading Up 0.9%

Shares of AMAT traded up $3.95 during mid-day trading on Thursday, hitting $440.56. The company had a trading volume of 14,603,213 shares, compared to its average volume of 7,312,846. The stock has a market cap of $349.63 billion, a PE ratio of 45.09, a P/E/G ratio of 1.91 and a beta of 1.66. The business's 50-day simple moving average is $375.73 and its 200-day simple moving average is $317.13. Applied Materials has a 1-year low of $153.47 and a 1-year high of $448.45. The company has a quick ratio of 1.94, a current ratio of 2.71 and a debt-to-equity ratio of 0.30.

Applied Materials Increases Dividend

The business also recently announced a quarterly dividend, which will be paid on Thursday, June 11th. Investors of record on Thursday, May 21st will be given a $0.53 dividend. This is a boost from Applied Materials's previous quarterly dividend of $0.46. This represents a $2.12 annualized dividend and a dividend yield of 0.5%. The ex-dividend date of this dividend is Thursday, May 21st. Applied Materials's dividend payout ratio is 21.70%.

Wall Street Analyst Weigh In

A number of brokerages recently commented on AMAT. Stifel Nicolaus raised their price objective on shares of Applied Materials from $340.00 to $450.00 and gave the company a "buy" rating in a research report on Friday, February 13th. Barclays boosted their price objective on shares of Applied Materials from $360.00 to $450.00 and gave the stock an "overweight" rating in a research report on Friday, February 13th. KGI Securities raised shares of Applied Materials to an "outperform" rating and set a $425.00 price objective on the stock in a research note on Friday, February 13th. Citigroup raised their target price on shares of Applied Materials from $420.00 to $520.00 and gave the company a "buy" rating in a report on Tuesday. Finally, Weiss Ratings reaffirmed a "buy (b-)" rating on shares of Applied Materials in a report on Friday, March 27th. Twenty-eight investment analysts have rated the stock with a Buy rating and seven have issued a Hold rating to the company's stock. According to MarketBeat.com, the stock presently has an average rating of "Moderate Buy" and an average price target of $384.52.

Insider Buying and Selling at Applied Materials

In other Applied Materials news, CFO Brice Hill sold 5,000 shares of the company's stock in a transaction dated Tuesday, February 17th. The stock was sold at an average price of $361.21, for a total transaction of $1,806,050.00. Following the completion of the sale, the chief financial officer directly owned 138,565 shares in the company, valued at $50,051,063.65. This represents a 3.48% decrease in their ownership of the stock. The sale was disclosed in a legal filing with the SEC, which is available through this hyperlink. Also, Director Judy Bruner sold 2,500 shares of the stock in a transaction that occurred on Wednesday, February 25th. The stock was sold at an average price of $391.71, for a total transaction of $979,275.00. Following the sale, the director directly owned 26,089 shares of the company's stock, valued at approximately $10,219,322.19. This trade represents a 8.74% decrease in their position. Additional details regarding this sale are available in the official SEC disclosure. Over the last 90 days, insiders sold 12,003 shares of company stock valued at $4,484,189. Company insiders own 0.30% of the company's stock.

Institutional Trading of Applied Materials

Several large investors have recently added to or reduced their stakes in AMAT. UBS AM A Distinct Business Unit of UBS Asset Management Americas LLC raised its holdings in shares of Applied Materials by 617.2% during the 3rd quarter. UBS AM A Distinct Business Unit of UBS Asset Management Americas LLC now owns 9,129,483 shares of the manufacturing equipment provider's stock valued at $1,869,170,000 after buying an additional 7,856,576 shares during the period. Coatue Management LLC boosted its stake in Applied Materials by 78.7% during the 4th quarter. Coatue Management LLC now owns 5,984,332 shares of the manufacturing equipment provider's stock valued at $1,537,913,000 after acquiring an additional 2,635,284 shares during the last quarter. Maverick Capital Ltd. acquired a new position in Applied Materials in the fourth quarter worth about $290,727,000. Price T Rowe Associates Inc. MD increased its holdings in shares of Applied Materials by 18.5% in the 4th quarter. Price T Rowe Associates Inc. MD now owns 5,384,256 shares of the manufacturing equipment provider's stock valued at $1,383,701,000 after acquiring an additional 840,486 shares during the last quarter. Finally, Janus Henderson Group PLC raised its holdings in shares of Applied Materials by 687.2% during the fourth quarter. Janus Henderson Group PLC now owns 830,219 shares of the manufacturing equipment provider's stock worth $213,280,000 after purchasing an additional 724,759 shares during the period. 80.56% of the stock is currently owned by institutional investors and hedge funds.

Trending Headlines about Applied Materials

Here are the key news stories impacting Applied Materials this week:

• Positive Sentiment: Applied Materials reported better-than-expected Q2 results, with EPS and revenue both topping analyst forecasts, signaling healthy demand for its chip-making tools. Applied Materials (AMAT) Surpasses Q2 Earnings and Revenue Estimates
• Positive Sentiment: The company issued third-quarter guidance above expectations for both EPS and revenue, reinforcing confidence that AI-related spending will keep driving growth. Applied Materials sees upbeat quarterly revenue on sustained AI spending
• Positive Sentiment: Management highlighted record quarterly performance and ongoing strength in AI computing infrastructure buildout, which supports the bullish stock reaction. Applied Materials delivers record quarter and stronger-than-expected outlook
• Positive Sentiment: Recent analyst price-target increases and multiple Buy/Overweight ratings added to momentum ahead of and after earnings. Citi massively revamps Applied Materials stock price target
• Neutral Sentiment: Investors were already expecting a big move into earnings, with options markets pricing in elevated volatility around the report. Applied Materials Last-Minute Q2 Earnings Alert
• Neutral Sentiment: Analysts and media continued to frame AMAT as a key AI infrastructure beneficiary, keeping sentiment constructive without adding new company-specific news. How Applied Materials (AMAT) Is Deepening Its Role in AI Chip Manufacturing
• Negative Sentiment: Some investors remain cautious because growth in China has been slowing and export restrictions could continue to pressure demand in certain segments. Applied Materials' Coming AI Boom Comes Under the Microscope as It Reports Earnings

Applied Materials Company Profile

Applied Materials, Inc is a U.S.-based supplier of equipment, services and software used to manufacture semiconductor chips, flat panel displays and other advanced materials. Headquartered in Santa Clara, California, the company designs and sells capital equipment and related technologies that enable production of integrated circuits, display panels and materials used across the electronics supply chain.

Applied Materials' offerings include process equipment and factory software that support critical steps in device fabrication, such as deposition, etch, implantation, inspection and metrology, as well as systems for packaging and advanced heterogeneous integration.

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