Applied Materials posted record fiscal third-quarter revenue of $9.12 billion, up 25% year over year, as AI chip demand drove its best quarter ever. The company also guided fourth-quarter revenue and profit above prior analyst expectations.
Applied Materials just closed its biggest quarter on record. The chip equipment maker reported fiscal third-quarter 2026 revenue of $9.12 billion, a 25% jump from $7.30 billion a year earlier, driven by AI infrastructure demand.
Semiconductor Systems leads the surge
The company's core Semiconductor Systems segment sells the equipment chipmakers use to deposit, etch and shape materials on silicon wafers. It brought in a record $7.04 billion, up 27% year over year. Demand came from three areas: advanced logic, DRAM and advanced packaging.
As a result, Applied Materials expects advanced packaging revenue to grow more than 70% in calendar 2026. Profits rose faster than sales: non-GAAP earnings per share hit a record $3.50, up 41% from the prior year. GAAP net income came in at $2.54 billion, up 43%. The non-GAAP gross margin landed at 50.4%, and the non-GAAP operating margin reached 34%.
Services growth backs a higher guide
Applied Global Services, which handles maintenance, parts and upgrades for installed equipment, grew 22% to $1.78 billion. For the fourth quarter of fiscal 2026, the company guided to revenue of approximately $10.25 billion, plus or minus $500 million, and non-GAAP EPS of about $4.02, plus or minus $0.20 — both above prior analyst expectations.
Management also raised its Semiconductor Systems revenue outlook for calendar 2026, with CEO Gary Dickerson pointing to demand visibility stretching into 2030, which he described as unprecedented.
China, however, accounted for approximately 26% to 28% of revenue in recent quarters, a significant share for a company selling strategically sensitive technology.
Source: Crypto Briefing
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