We use cookies to understand how you use our site and to improve your experience.
This includes personalizing content and advertising.
By pressing "Accept All" or closing out of this banner, you consent to the use of all cookies and similar technologies and the sharing of information they collect with third parties.
You can reject marketing cookies by pressing "Deny Optional," but we still use essential, performance, and functional cookies.
In addition, whether you "Accept All," Deny Optional," click the X or otherwise continue to use the site, you accept our Privacy Policy and Terms of Service, revised from time to time.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
AMAT Q2 revenues rose 11.4% year over year, driven by AI infrastructure demand and chip tools growth.
Applied Materials highlighted record foundry revenues and rising DRAM, packaging and services demand.
AMAT guided Q3 revenues to $8.95B and sees continued growth supported by customer visibility.
Applied Materials (AMAT - Free Report) reported second-quarter fiscal 2026 non-GAAP earnings of $2.86 per share, which beat the Zacks Consensus Estimate by 6.5%. AMAT’s second-quarter fiscal 2026 non-GAAP earnings increased 19.7% from the year-ago quarter’s reported figure of $2.39 per share.
AMAT beat the Zacks Consensus Estimate in each of the trailing four quarters, with an average surprise of 7.1%.
AMAT reported revenues of $7.91 billion in second-quarter fiscal 2026, surpassing the consensus estimate by 2.8%. This top line increased 11.4% from the year-ago quarter’s reported figure of $7.1 billion.
AMAT Delivers Record Quarter as AI Build-Out Accelerates
Management tied the quarter’s strength to the rapid global build-out of AI computing infrastructure and Applied Materials’ leadership in leading-edge foundry-logic, DRAM and advanced packaging. The company also highlighted rising customer visibility, including rolling eight-quarter forecasts from its largest customers, supporting planning for capacity and service resources.
Applied Materials, Inc. Price, Consensus and EPS Surprise
Applied Materials emphasized that AI demand is expanding beyond training and inference into agentic applications, which it said are more CPU-intensive and can raise demand for DRAM and NAND. The company also noted broad internal AI adoption, with more than 35,000 users across its global workforce.
Applied Materials Sees EPIC Platform Deepening Partnerships
Applied Materials pointed to momentum in its EPIC platform, designed to shorten commercialization cycles from research to full-scale manufacturing. During the quarter, it announced multiple partner engagements, including TSMC joining as a founding partner alongside Micron, Samsung and SK hynix, with Advantest as an innovation partner and ASU, RPI and Stanford as research partners.
The company said the EPIC Center in Silicon Valley remains on track to begin operations in the fall. Applied Materials framed this collaboration model as a way to improve R&D productivity, increase multi-node visibility for investment decisions and accelerate design wins for its tools and services.
AMAT Segment Mix Reflects Strength in Core Markets
Segment performance was led by Semiconductor Systems, which generated $5.97 billion in revenues in the quarter, up 10% from $5.40 billion reported a year earlier. Applied Global Services posted $1.67 billion in revenues, up 17% from the $1.42 billion reported in the prior-year quarter, while Other revenues were $280 million compared with $279 million a year ago.
Within Semiconductor Systems, the company cited record foundry revenues and strength across ALD, epitaxy and materials treatments, alongside DRAM revenue growth and an acceleration in advanced packaging tied to 3D stacking investments. Management also noted that China represented 24% of Semiconductor Systems plus AGS revenues.
Applied Materials Expands Operating Leverage and Profitability
On a non-GAAP basis, Applied Materials reported a gross margin of 50%. On a non-GAAP basis, operating income was $2.54 billion, translating to a 32.1% operating margin. Management attributed margin expansion to value-based pricing on differentiated products and ongoing manufacturing cost improvements, while also emphasizing continued investment in R&D and operational readiness to support customer growth.
AMAT’s Balance Sheet and Cash Flow
As of April 26, 2026, cash and cash equivalents plus short-term investments were $8.24 billion compared with $8.51 billion at the end of the previous quarter. Long-term debt was $5.26 billion at the end of second-quarter fiscal 2026, down from $6.46 billion at the end of fiscal 2025.
Applied Materials generated $845 million of cash from operations in the quarter and reported non-GAAP free cash flow of $210 million.
Shareholder returns totaled $765 million, including $400 million in share repurchases and $365 million in dividends. The company also noted $13.2 billion remaining under its share repurchase authorization at quarter-end.
Applied Materials Guides Higher Q3 Revenues and Earnings
For the third quarter of fiscal 2026, Applied Materials expects total revenues of $8.95 billion plus or minus $500 million. The Zacks Consensus Estimate for revenues is pegged at $8.28 billion, indicating year-over-year increase of 13%.
Applied Materials expects non-GAAP earnings of $3.36 per share plus or minus 20 cents. The Zacks Consensus Estimate for third-quarter fiscal 2026 earnings is pegged at $2.94, indicating year-over-year increase of 18.6%.
Within that outlook, Semiconductor Systems revenues are projected at about $6.90 billion, Applied Global Services at about $1.75 billion and Other at about $300 million.
The company expects non-GAAP gross margin of about 50.1%, non-GAAP operating expenses of roughly $1.49 billion and a non-GAAP tax rate near 11%.
Management said demand indicators have strengthened and reiterated expectations for continued growth into 2027 based on customer signals and expanding cleanroom capacity initiatives.
Shares of Broadcom have gained 21.7% year to date. The Zacks Consensus Estimate for Broadcom’s 2026 earnings is pegged at $11.45 per share, up by a penny over the past 30 days, indicating an increase of 68% year over year.
Shares of Celestica have rallied 41.7% year to date. The consensus estimate for Celestica’s 2026 earnings is pegged at $9.85 per share, up $1.01 over the past seven days, indicating an increase of 62.8% year over year.
Samsara shares have lost 14% year to date. The Zacks Consensus Estimate for IOT’s fiscal 2027 earnings is pegged at 68 cents per share, up 11 cents over the past 60 days, indicating an increase of 21.4% year over year.
Zacks' 7 Best Strong Buy Stocks (New Research Report)
Valued at $99, click below to receive our just-released report
predicting the 7 stocks that will soar highest in the coming month.
View the Zacks #1 Rank List
Image: Bigstock
Applied Materials Q2 Earnings Beat Estimates, Revenues Increase Y/Y
Key Takeaways
Applied Materials (AMAT - Free Report) reported second-quarter fiscal 2026 non-GAAP earnings of $2.86 per share, which beat the Zacks Consensus Estimate by 6.5%. AMAT’s second-quarter fiscal 2026 non-GAAP earnings increased 19.7% from the year-ago quarter’s reported figure of $2.39 per share.
AMAT beat the Zacks Consensus Estimate in each of the trailing four quarters, with an average surprise of 7.1%.
AMAT reported revenues of $7.91 billion in second-quarter fiscal 2026, surpassing the consensus estimate by 2.8%. This top line increased 11.4% from the year-ago quarter’s reported figure of $7.1 billion.
AMAT Delivers Record Quarter as AI Build-Out Accelerates
Management tied the quarter’s strength to the rapid global build-out of AI computing infrastructure and Applied Materials’ leadership in leading-edge foundry-logic, DRAM and advanced packaging. The company also highlighted rising customer visibility, including rolling eight-quarter forecasts from its largest customers, supporting planning for capacity and service resources.
Applied Materials, Inc. Price, Consensus and EPS Surprise
Applied Materials, Inc. price-consensus-eps-surprise-chart | Applied Materials, Inc. Quote
Applied Materials emphasized that AI demand is expanding beyond training and inference into agentic applications, which it said are more CPU-intensive and can raise demand for DRAM and NAND. The company also noted broad internal AI adoption, with more than 35,000 users across its global workforce.
Applied Materials Sees EPIC Platform Deepening Partnerships
Applied Materials pointed to momentum in its EPIC platform, designed to shorten commercialization cycles from research to full-scale manufacturing. During the quarter, it announced multiple partner engagements, including TSMC joining as a founding partner alongside Micron, Samsung and SK hynix, with Advantest as an innovation partner and ASU, RPI and Stanford as research partners.
The company said the EPIC Center in Silicon Valley remains on track to begin operations in the fall. Applied Materials framed this collaboration model as a way to improve R&D productivity, increase multi-node visibility for investment decisions and accelerate design wins for its tools and services.
AMAT Segment Mix Reflects Strength in Core Markets
Segment performance was led by Semiconductor Systems, which generated $5.97 billion in revenues in the quarter, up 10% from $5.40 billion reported a year earlier. Applied Global Services posted $1.67 billion in revenues, up 17% from the $1.42 billion reported in the prior-year quarter, while Other revenues were $280 million compared with $279 million a year ago.
Within Semiconductor Systems, the company cited record foundry revenues and strength across ALD, epitaxy and materials treatments, alongside DRAM revenue growth and an acceleration in advanced packaging tied to 3D stacking investments. Management also noted that China represented 24% of Semiconductor Systems plus AGS revenues.
Applied Materials Expands Operating Leverage and Profitability
On a non-GAAP basis, Applied Materials reported a gross margin of 50%. On a non-GAAP basis, operating income was $2.54 billion, translating to a 32.1% operating margin. Management attributed margin expansion to value-based pricing on differentiated products and ongoing manufacturing cost improvements, while also emphasizing continued investment in R&D and operational readiness to support customer growth.
AMAT’s Balance Sheet and Cash Flow
As of April 26, 2026, cash and cash equivalents plus short-term investments were $8.24 billion compared with $8.51 billion at the end of the previous quarter. Long-term debt was $5.26 billion at the end of second-quarter fiscal 2026, down from $6.46 billion at the end of fiscal 2025.
Applied Materials generated $845 million of cash from operations in the quarter and reported non-GAAP free cash flow of $210 million.
Shareholder returns totaled $765 million, including $400 million in share repurchases and $365 million in dividends. The company also noted $13.2 billion remaining under its share repurchase authorization at quarter-end.
Applied Materials Guides Higher Q3 Revenues and Earnings
For the third quarter of fiscal 2026, Applied Materials expects total revenues of $8.95 billion plus or minus $500 million. The Zacks Consensus Estimate for revenues is pegged at $8.28 billion, indicating year-over-year increase of 13%.
Applied Materials expects non-GAAP earnings of $3.36 per share plus or minus 20 cents. The Zacks Consensus Estimate for third-quarter fiscal 2026 earnings is pegged at $2.94, indicating year-over-year increase of 18.6%.
Within that outlook, Semiconductor Systems revenues are projected at about $6.90 billion, Applied Global Services at about $1.75 billion and Other at about $300 million.
The company expects non-GAAP gross margin of about 50.1%, non-GAAP operating expenses of roughly $1.49 billion and a non-GAAP tax rate near 11%.
Management said demand indicators have strengthened and reiterated expectations for continued growth into 2027 based on customer signals and expanding cleanroom capacity initiatives.
Zacks Rank and Other Stocks to Consider
Currently, AMAT carries a Zacks Rank #2 (Buy).
Some other top-ranked stocks in the broader Zacks Computer and Technology sector are Broadcom (AVGO - Free Report) , Celestica (CLS - Free Report) and Samsara (IOT - Free Report) , each sporting a Zacks Rank #1 (Strong Buy) at present. You can see the complete list of today’s Zacks #1 Rank stocks here.
Shares of Broadcom have gained 21.7% year to date. The Zacks Consensus Estimate for Broadcom’s 2026 earnings is pegged at $11.45 per share, up by a penny over the past 30 days, indicating an increase of 68% year over year.
Shares of Celestica have rallied 41.7% year to date. The consensus estimate for Celestica’s 2026 earnings is pegged at $9.85 per share, up $1.01 over the past seven days, indicating an increase of 62.8% year over year.
Samsara shares have lost 14% year to date. The Zacks Consensus Estimate for IOT’s fiscal 2027 earnings is pegged at 68 cents per share, up 11 cents over the past 60 days, indicating an increase of 21.4% year over year.