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For the fiscal third quarter, AMAT expects revenues to be $8.95 billion (+/- $500 million). The Zacks Consensus Estimate for revenues is pegged at $9 billion, suggesting an increase of 23.3% from the year-ago quarter.
Applied Materials projects non-GAAP earnings per share of $3.36 (+/- $0.20) per share. The Zacks Consensus Estimate for earnings is pegged at $3.36 per share, indicating an increase of 35.5% from the year-ago quarter’s reported figure. The figure has been revised upward in the past 30 days.
Image Source: Zacks Investment Research
AMAT has an impressive earnings surprise history. AMAT beat the Zacks Consensus Estimate in each of the past four quarters, with an average earnings surprise of 6%.
Our proven model predicts an earnings beat for AMAT this earnings season. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the chances of an earnings beat, which is the case here.
Earnings ESP: Earnings ESP, which represents the difference between the Most Accurate Estimate ($3.41 per share) and the Zacks Consensus Estimate ($3.36 per share), is +1.52%.
Applied Materials’ third quarter of fiscal 2026 results are expected to benefit from the acceleration of AI infrastructure spending and the growing complexity of semiconductor manufacturing. The company’s exposure to leading-edge foundry-logic, DRAM and advanced packaging is likely to have remained a key driver of momentum in the to-be-reported quarter.
Demand for wafer fabrication equipment is expected to have remained strong as cloud service providers continue to expand AI infrastructure and chipmakers increase capacity. Applied Materials is also seeing customers find ways to expand cleanroom capacity, creating opportunities for equipment deliveries. This trend is likely to have supported growth in the third quarter.
The transition toward gate-all-around architectures should have remained another important catalyst. Applied Materials’ broad portfolio of deposition, etch, inspection and materials engineering solutions positions it well as chipmakers adopt increasingly complex transistor structures. Its recently launched GAA products could further strengthen its position as these technologies move toward broader adoption.
DRAM is also likely to remain a strong contributor as AI workloads drive demand for memory and customers invest in architectures. At the same time, advanced packaging is gaining importance as chipmakers increasingly rely on 3D stacking and high-bandwidth memory to improve AI system performance and efficiency. Applied Materials’ positioning in these areas should support momentum.
Applied Global Services is expected to have benefited from higher fab utilization, a growing installed base and demand for advanced services that improve production, yield and efficiency. Overall, the third quarter should reflect strength across Applied Materials’ AI-related markets, with customer visibility and technology transitions supporting the growth trajectory.
Applied Materials’ Price Performance & Valuation
Applied Materials shares have gained 109.8% year to date, outperforming the Zacks Electronics – Semiconductors industry’s growth of 32.8%.
AMAT YTD Performance Chart
Image Source: Zacks Investment Research
Let us now look at the value Applied Materials offers to its investors at current levels. AMAT is currently trading at a premium with a forward 12-month price-to-sales (P/S) of 10.54X compared with the industry’s 5.35X. A Value score of D substantiates its premium price.
AMAT Forward 12-Month (P/S) Valuation Chart
Image Source: Zacks Investment Research
Investment Thesis for AMAT Stock
Applied Materials is seeing AI adoption broaden and diversify, which is pushing wafer fab equipment spending toward leading-edge foundry-logic, DRAM and advanced packaging. Management expects these three areas to drive more than 80% of year-on-year total WFE growth in calendar 2026, with a similar profile in 2027. The company also expects its semiconductor equipment business to grow more than 30% in calendar 2026 as customers expand cleanroom capacity and accelerate equipment pull-ins.
AI computing is increasing DRAM intensity, and management noted that leading-edge logic and DRAM fabs are running at full capacity. In the second quarter of fiscal 2026, DRAM revenues within Semiconductor Systems were $1.7 billion, up 18% year over year, with management pointing to strength in DRAM wiring, patterning and peripheral logic steps. The company also expects DRAM and advanced packaging to be central drivers of WFE growth in 2026 and 2027.
Applied Materials commands a broad portfolio of offerings and hence competes with KLA Corporation (KLAC - Free Report) , Lam Research (LRCX - Free Report) and Camtek (CAMT - Free Report) in the WFE and testing market. Applied Materials and KLA Corporation offer similar solutions, such as Wafer Inspection, Yield Enhancement and Process Control inspection systems, while Camtek stands at the forefront of semiconductor inspection and metrology solutions.
Camtek is focused on high-performance computing modules, advanced packaging and silicon carbide technologies. Lam Research develops Atomic Layer Deposition tools like AT200M, AT410 and AT650P that are similar to the devices made by Applied Materials. While Camtek, Lam Research and KLA Corporation overlap with Applied Materials, AMAT’s broad product portfolio enables it to seamlessly integrate its equipment across multiple processes.
Applied Materials’ integration of equipment across multiple processes reduces reliance on any single technology cycle and enables it to price its product stack better to protect margins. Moreover, AMAT’s DRAM offerings are gaining traction as customers are aggressively investing in 6F² nodes supported by rising demand for high bandwidth memory DRAM, driven by AI workloads.
Conclusion: Buy AMAT Stock Now
Overall, Applied Materials’ exposure to AI-driven semiconductor investment, rising process complexity and advanced packaging provides a strong foundation for sustained growth. Its leadership across leading-edge logic, DRAM and packaging, combined with expanding services and improving customer visibility, should support durable demand, margin expansion and stronger execution through the current cycle. Given these dynamics, it is safe to accumulate this stock at present.
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AMAT to Post Q3 Earnings: Time to Buy, Sell or Hold the Stock?
Key Takeaways
Applied Materials (AMAT - Free Report) is scheduled to report third-quarter fiscal 2026 results on Aug. 13.
For the fiscal third quarter, AMAT expects revenues to be $8.95 billion (+/- $500 million). The Zacks Consensus Estimate for revenues is pegged at $9 billion, suggesting an increase of 23.3% from the year-ago quarter.
Applied Materials projects non-GAAP earnings per share of $3.36 (+/- $0.20) per share. The Zacks Consensus Estimate for earnings is pegged at $3.36 per share, indicating an increase of 35.5% from the year-ago quarter’s reported figure. The figure has been revised upward in the past 30 days.
Image Source: Zacks Investment Research
AMAT has an impressive earnings surprise history. AMAT beat the Zacks Consensus Estimate in each of the past four quarters, with an average earnings surprise of 6%.
Applied Materials, Inc. Price and EPS Surprise
Applied Materials, Inc. price-eps-surprise | Applied Materials, Inc. Quote
Earnings Whispers for AMAT Stock
Our proven model predicts an earnings beat for AMAT this earnings season. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the chances of an earnings beat, which is the case here.
Earnings ESP: Earnings ESP, which represents the difference between the Most Accurate Estimate ($3.41 per share) and the Zacks Consensus Estimate ($3.36 per share), is +1.52%.
Zacks Rank: AMAT carries a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank stocks here.
Factors to Note for AMAT’s Q3 FY26
Applied Materials’ third quarter of fiscal 2026 results are expected to benefit from the acceleration of AI infrastructure spending and the growing complexity of semiconductor manufacturing. The company’s exposure to leading-edge foundry-logic, DRAM and advanced packaging is likely to have remained a key driver of momentum in the to-be-reported quarter.
Demand for wafer fabrication equipment is expected to have remained strong as cloud service providers continue to expand AI infrastructure and chipmakers increase capacity. Applied Materials is also seeing customers find ways to expand cleanroom capacity, creating opportunities for equipment deliveries. This trend is likely to have supported growth in the third quarter.
The transition toward gate-all-around architectures should have remained another important catalyst. Applied Materials’ broad portfolio of deposition, etch, inspection and materials engineering solutions positions it well as chipmakers adopt increasingly complex transistor structures. Its recently launched GAA products could further strengthen its position as these technologies move toward broader adoption.
DRAM is also likely to remain a strong contributor as AI workloads drive demand for memory and customers invest in architectures. At the same time, advanced packaging is gaining importance as chipmakers increasingly rely on 3D stacking and high-bandwidth memory to improve AI system performance and efficiency. Applied Materials’ positioning in these areas should support momentum.
Applied Global Services is expected to have benefited from higher fab utilization, a growing installed base and demand for advanced services that improve production, yield and efficiency. Overall, the third quarter should reflect strength across Applied Materials’ AI-related markets, with customer visibility and technology transitions supporting the growth trajectory.
Applied Materials’ Price Performance & Valuation
Applied Materials shares have gained 109.8% year to date, outperforming the Zacks Electronics – Semiconductors industry’s growth of 32.8%.
AMAT YTD Performance Chart
Image Source: Zacks Investment Research
Let us now look at the value Applied Materials offers to its investors at current levels. AMAT is currently trading at a premium with a forward 12-month price-to-sales (P/S) of 10.54X compared with the industry’s 5.35X. A Value score of D substantiates its premium price.
AMAT Forward 12-Month (P/S) Valuation Chart
Image Source: Zacks Investment Research
Investment Thesis for AMAT Stock
Applied Materials is seeing AI adoption broaden and diversify, which is pushing wafer fab equipment spending toward leading-edge foundry-logic, DRAM and advanced packaging. Management expects these three areas to drive more than 80% of year-on-year total WFE growth in calendar 2026, with a similar profile in 2027. The company also expects its semiconductor equipment business to grow more than 30% in calendar 2026 as customers expand cleanroom capacity and accelerate equipment pull-ins.
AI computing is increasing DRAM intensity, and management noted that leading-edge logic and DRAM fabs are running at full capacity. In the second quarter of fiscal 2026, DRAM revenues within Semiconductor Systems were $1.7 billion, up 18% year over year, with management pointing to strength in DRAM wiring, patterning and peripheral logic steps. The company also expects DRAM and advanced packaging to be central drivers of WFE growth in 2026 and 2027.
Applied Materials commands a broad portfolio of offerings and hence competes with KLA Corporation (KLAC - Free Report) , Lam Research (LRCX - Free Report) and Camtek (CAMT - Free Report) in the WFE and testing market. Applied Materials and KLA Corporation offer similar solutions, such as Wafer Inspection, Yield Enhancement and Process Control inspection systems, while Camtek stands at the forefront of semiconductor inspection and metrology solutions.
Camtek is focused on high-performance computing modules, advanced packaging and silicon carbide technologies. Lam Research develops Atomic Layer Deposition tools like AT200M, AT410 and AT650P that are similar to the devices made by Applied Materials. While Camtek, Lam Research and KLA Corporation overlap with Applied Materials, AMAT’s broad product portfolio enables it to seamlessly integrate its equipment across multiple processes.
Applied Materials’ integration of equipment across multiple processes reduces reliance on any single technology cycle and enables it to price its product stack better to protect margins. Moreover, AMAT’s DRAM offerings are gaining traction as customers are aggressively investing in 6F² nodes supported by rising demand for high bandwidth memory DRAM, driven by AI workloads.
Conclusion: Buy AMAT Stock Now
Overall, Applied Materials’ exposure to AI-driven semiconductor investment, rising process complexity and advanced packaging provides a strong foundation for sustained growth. Its leadership across leading-edge logic, DRAM and packaging, combined with expanding services and improving customer visibility, should support durable demand, margin expansion and stronger execution through the current cycle. Given these dynamics, it is safe to accumulate this stock at present.