Applied Materials (AMAT) — Company Research

Last Updated: 15 August 2026

Applied Materials sells the machines that put atoms onto silicon wafers and take them off again. It is the largest semiconductor process-equipment company in the world by revenue, and after four years of low-single-digit growth it has just delivered its steepest quarter on record. Third-quarter FY2026 revenue reached $9,115m, up 25% year on year and up 15% sequentially, with a record 34.0% non-GAAP operating margin and a thirteenth consecutive quarter of gross-margin expansion. Management guided the fourth quarter to $10,250m, which would be 51% growth. The shares nevertheless fell roughly 5% the following day. This report sets out the reported figures, the installed-base annuity that makes the business less cyclical than it looks, the valuation on current multiples, and the risks that remain live. No analyst ratings, no price targets.

1. Company Snapshot

Field	Value
Company	Applied Materials, Inc.
Ticker / Exchange	AMAT / NASDAQ
Sector	Information Technology — Semiconductor Materials and Equipment
Headquarters	Santa Clara, California, USA
CEO / Leadership	Gary E. Dickerson, President and Chief Executive Officer (CEO since September 2013, re-elected to the board on 12 March 2026). Brice Hill, Senior Vice President and Chief Financial Officer. Dr. Prabu Raja, President, Semiconductor Products Group.
Employees	38,900 regular full-time employees at 26 July 2026, up from 36,400 at the end of the previous quarter and 36,100 a year earlier
Revenue (FY2025, year to 26 Oct 2025)	$28,368m, up 4.4% year on year
Net income (FY2025)	$6,998m; GAAP diluted EPS $8.66; non-GAAP diluted EPS $9.42
Most recent quarter	Q3 FY2026 (to 26 Jul 2026), reported 13 Aug 2026: revenue $9,115m, up 25%; GAAP diluted EPS $3.17; non-GAAP diluted EPS $3.50
Market cap	Approximately $402.7bn (close of 14 Aug 2026, share price $507.18)
Shares outstanding	Approximately 794m (800m diluted weighted average in Q3 FY2026)
Fiscal year end	Last Sunday of October (FY2025 ended 26 Oct 2025)
Dividend	$0.53 per quarter, raised 15% on 13 March 2026; ninth consecutive annual increase. Annualised run-rate $2.12.
Buyback authorisation remaining	$12.8bn at 26 July 2026; target is to return 80–100% of free cash flow

Related ChartsView tools: Live Charts for intraday price action, and the Economic Calendar for the macro releases that drive semiconductor capital spending expectations.

2. Bull and Bear Case

Bull Case

• The growth inflection is reported, not forecast: after four years averaging roughly 5% growth, Q3 FY2026 revenue rose 25% year on year to $9,115m and 15% sequentially, the largest quarter-on-quarter increase in the company's history. Q4 is guided to $10,250m, which would be 51% growth, with non-GAAP EPS guided to $4.02 against $2.17 a year earlier.
• Margin expansion is structural, not mix luck: non-GAAP operating margin reached a record 34.0% and gross margin expanded year on year for a thirteenth consecutive quarter. Management attributes this to three years of systematic value-based pricing, with company gross margin now above 50% and Semiconductor Systems above 55%.
• The installed-base annuity is larger than the equipment backlog: Applied Global Services carried $7,141m of backlog at FY2025 year end, marginally more than Semiconductor Systems' $7,105m, and AGS grew 22% in Q3 FY2026 at a 30.1% operating margin. More than 37,000 chambers in the field are connected to the proprietary AIx software platform, and management guides AGS to grow over 20% in calendar 2026 with a mid-teens sustainable rate. This is the part of the business that does not disappear in a downcycle.
• Positioned in the fastest-growing parts of wafer fab equipment: management expects leading-edge foundry-logic, DRAM and advanced packaging to represent roughly 80% of wafer fab equipment growth in 2026 and 2027. DRAM revenue including high-bandwidth memory packaging grew 52% year on year to record levels in Q3, packaging revenue is guided to grow over 70% in calendar 2026, and process diagnostics and control over 50%.
• Capital return is consistent and rising: the quarterly dividend was raised 15% to $0.53 on 13 March 2026, the ninth consecutive annual increase, with the payout more than doubling in four years. $12.8bn of buyback authorisation remains and $860m was distributed in Q3 FY2026 alone against a target of returning 80–100% of free cash flow.

Bear Case

• Government investigations are only partly resolved: Applied disclosed subpoenas from the Department of Justice, the Bureau of Industry and Security and the Securities and Exchange Commission relating to China customer shipments and export-controls compliance, and stated it has continued to receive related subpoenas. The BIS strand settled on 11 February 2026 for $252.5m — twice the transaction value, the statutory maximum, and one of the largest such penalties ever — but the DOJ and SEC matters are not disclosed as resolved.
• Building capacity into what may be a cyclical peak: the company added more than 1,500 people in manufacturing and services support in a single quarter, taking headcount from 36,400 to 38,900, having cut roughly 1,400 roles only in November 2025. It is investing to double quarterly system output by 2028. Inventories rose to $6,564m and receivables to $7,691m. If wafer fab equipment demand normalises, that fixed-cost base becomes operating leverage in reverse.
• Extreme customer concentration: two customers accounted for approximately 19% and 15% of FY2025 revenue, roughly 34% between them, up sharply from 12% and 11% in FY2024. A single customer pausing a node ramp is a multi-billion-dollar revenue event, and the 10-K names concentration as a specific risk factor.
• The China exposure is still shrinking and still political: China fell from 37.2% of FY2024 revenue to 30.1% in FY2025 to 28% in Q3 FY2026. Applied guided that the September 2025 expansion of the affiliates rule would reduce FY2026 revenue by roughly $600m, and notes that foreign competitors can still serve Chinese customers it cannot.
• Expectations are demanding and insiders sold the high: the stock reached an all-time high of $739.67 in June 2026, fell roughly 20% into late July, and dropped a further 5% on 14 August 2026 despite beating on revenue and earnings and raising guidance. Across mid-to-late June, the CEO disposed of roughly 151,000 shares for about $99m and other officers a further $60m-plus, with not one of the 30 Form 4s filed in 2026 carrying a Rule 10b5-1 designation, and no open-market purchases at all.

3. Business Segments

Applied reports two principal segments plus a residual. From Q1 FY2026 the 200mm equipment business moved from services into Semiconductor Systems, corporate support costs are now fully allocated to segments, and Display ceased to be a separately reportable segment. Figures below are FY2025 (year to 26 October 2025) on the basis reported in that year's Form 10-K.

Segment	% of revenue	What it is
Semiconductor Systems	73.3% ($20,798m; operating income $7,379m, 35.5% margin)	Wafer fabrication equipment across the full materials-engineering stack: chemical, physical and atomic-layer deposition and epitaxy, conductor and dielectric etch, chemical mechanical planarisation, ion implantation, thermal processing, eBeam and optical process control, and advanced packaging tools. FY2025 end-market mix was foundry and logic 67%, DRAM 26%, flash memory 7%.
Applied Global Services	22.5% ($6,385m; operating income $1,792m, 28.1% margin)	Spare parts, field service, factory-automation software and subscription service agreements sold against the installed base, plus the legacy 200mm equipment business through FY2025. Recurring and far less cyclical than systems; more than 37,000 field chambers are connected to the AIx monitoring and predictive-analytics platform.
Display and Adjacent Markets	3.7% ($1,060m; operating income $235m, 22.2% margin)	Equipment for LCD and OLED display manufacturing and adjacent markets including augmented-reality optics. De-designated as a reportable segment at FY2025 year end and now reported inside Corporate and Other.
Corporate and Other	4.2% ($1,185m total including Display; operating loss $(882)m)	Unallocated corporate costs of $(1,886)m and restructuring charges of $(181)m, with the Display business sitting inside this line. Consolidated FY2025 operating income was $8,289m, a 29.2% margin.

Total backlog at 26 October 2025 was $15,002m, split Semiconductor Systems $7,105m, Applied Global Services $7,141m and Corporate and Other $756m, with roughly 31% not expected to convert within twelve months.

4. Business Model and Moat

How it makes money. Two engines with opposite characteristics. Semiconductor Systems sells lumpy, high-value capital equipment through a direct sales force to a very small number of chipmakers; revenue arrives in large blocks tied to fab construction and node transitions. Applied Global Services sells the aftermarket — spares, service, software and subscription agreements — against every tool ever installed, which produces recurring revenue that grows with the installed base regardless of whether new tools are being bought this quarter. The 10-K states the strategy explicitly: to shift the services and spares business to a subscription agreement model providing a more predictable revenue stream.

Breadth is the differentiator no competitor matches. Applied is the only vendor spanning deposition, etch, planarisation, ion implantation, thermal processing, process control and advanced packaging. Lam Research is deposition, etch and clean; KLA is process control; ASML is lithography; Tokyo Electron is coat and develop plus etch and deposition. The 10-K frames the moat not as the portfolio itself but as the ability to combine, co-optimise and integrate those technologies into differentiated solutions. In Q3 FY2026 the deposition, materials-removal and materials-modification product lines all set records simultaneously — which is what portfolio breadth looks like in a broad-based upcycle.

The switching cost is the recipe, not the tool. Once a deposition or etch chamber is qualified into a customer's process at a given node, requalifying an alternative costs months of cycle time and carries yield risk on a fab running at full capacity. Applied has industrialised this dependency through the EPIC platform, co-locating customer, supplier and university engineers inside its own research cleanroom so that its tools are designed into new architecture inflections years before volume production. Eleven EPIC engagements have been announced to date, including Samsung, TSMC, SK hynix, Micron, Broadcom, Advantest and SCREEN, alongside Arizona State University, Rensselaer Polytechnic Institute, Stanford and UC Berkeley.

Pricing power is the visible proof. Management stated that after three years of systematic value-based pricing, gross margin is now above 50% company-wide and above 55% in Semiconductor Systems, with thirteen consecutive quarters of year-on-year gross-margin expansion. A capital-equipment vendor raising price into a demand upcycle without losing share is the clearest evidence that the technical dependency is real.

5. Financial Health

All figures below come from Applied Materials' own quarterly earnings releases, Forms 10-K and 10-Q, and the SEC XBRL company facts dataset. The fiscal year ends on the last Sunday of October. Long-term debt is the non-current balance at each fiscal year end.

Fiscal Year	Revenue ($m)	YoY %	GAAP EPS	Adjusted EPS	Dividend/share	Long-term debt (YE)
FY2021 (to 31 Oct 2021)	23,063	+34.1%	$6.40	$6.84	$0.94	$5,452m
FY2022 (to 30 Oct 2022)	25,785	+11.8%	$7.44	$7.70	$1.02	$5,457m
FY2023 (to 29 Oct 2023)	26,517	+2.8%	$8.11	$8.05	$1.22	$5,461m
FY2024 (to 27 Oct 2024)	27,176	+2.5%	$8.61	$8.65	$1.52	$5,460m
FY2025 (to 26 Oct 2025)	28,368	+4.4%	$8.66	$9.42	$1.78	$6,455m

Notes on the table. FY2023 is the one year in which GAAP EPS exceeded the adjusted figure, on discrete tax items. FY2024 also carried $700m of current-maturity debt; FY2025 carried none, and at the most recent balance sheet date current debt was approximately $1,299m. FY2025 absorbed a $181m restructuring charge under the Fiscal 2025 Restructuring Plan announced in November 2025, covering roughly 4% of the global workforce, and a $41m goodwill impairment, both taken in the fourth quarter. FY2022 was the first full year under the October 2022 US export controls on China.

Quarter / Half	Revenue ($m)	Adjusted EPS	GAAP EPS
Q3 FY2026 (to 26 Jul 2026)	9,115	$3.50	$3.17
Q2 FY2026 (to 26 Apr 2026)	7,910	$2.86	$3.51
Q1 FY2026 (to 25 Jan 2026)	7,012	$2.38	$2.54
Q4 FY2025 (to 26 Oct 2025)	6,800	$2.17	$2.38
Q3 FY2025 (to 27 Jul 2025)	7,302	$2.48	$2.22
Q2 FY2025 (to 27 Apr 2025)	7,100	$2.39	$2.63
Q1 FY2025 (to 26 Jan 2025)	7,166	$2.38	$1.45
FY2025 total (four quarters to 26 Oct 2025)	28,368	$9.42	$8.66

The three FY2026 quarters at the top of the table sit outside the bold FY2025 total and are shown because Applied is mid-fiscal-year with one quarter left to report. GAAP EPS exceeded adjusted EPS in Q1 and Q2 FY2026 largely because interest and other income reached $1,237m across the first nine months against $625m a year earlier, mostly mark-to-market gains on strategic investments, alongside a low effective tax rate. Q1 FY2026 GAAP results separately absorbed the $253m export-controls legal settlement, which is why GAAP operating margin was 26.1% against 30.0% on a non-GAAP basis that quarter. Across the first nine months of FY2026, revenue was $24,037m against $21,568m, and GAAP diluted EPS $9.22 against $6.29.

6. Valuation Metrics

Raw metrics, August 2026. Not opinions on whether the stock is cheap or expensive.

Applied is mid-fiscal-year with Q3 FY2026 reported on 13 August 2026, so every trailing figure below is a hand-built twelve months to 26 July 2026 (Q4 FY2025 plus Q1, Q2 and Q3 FY2026), with the balance sheet taken at 26 July 2026. Trailing revenue on that basis is $30,837m, trailing GAAP diluted EPS $11.60 and trailing non-GAAP diluted EPS $10.91. Price and market data are as at the close of 14 August 2026, the session in which the shares fell roughly 5% following the Q3 result.

Metric	Value
Share price	$507.18 (close, 14 Aug 2026), down from $534.54 the previous session
Market cap	Approximately $402.7bn
Trailing P/E (GAAP)	Approximately 43.7x ($507.18 / trailing twelve-month GAAP diluted EPS $11.60). On trailing non-GAAP diluted EPS of $10.91 the same price is roughly 46.5x; GAAP currently sits above the adjusted figure because of investment mark-to-market gains.
P/E (forward)	Approximately 39.7x on the company's own guidance. Adding the guided Q4 FY2026 non-GAAP EPS midpoint of $4.02 to the three reported quarters gives full-year FY2026 non-GAAP EPS of approximately $12.76. A forward twelve-month consensus EPS of roughly $18.09, which spans into FY2027, would put the same price at about 28.0x.
P/S (TTM)	Approximately 13.1x (market cap $402.7bn / trailing revenue $30,837m)
EV/EBITDA (TTM)	Approximately 41.4x (enterprise value $400.0bn / EBITDA $9,668m). EBITDA is trailing GAAP operating income of $9,141m plus depreciation and amortisation of $527m taken from the cash flow statement add-back. Note that Applied's depreciation charge is small relative to operating income because much of the recent capital expenditure — the EPIC Center and the Singapore campus — is not yet in service, so EBITDA and operating income are unusually close.
P/FCF	Approximately 71.6x (market cap $402.7bn / free cash flow $5,623m; free cash flow is trailing operating cash flow $8,396m less capital expenditure $2,773m per the cash flow statement). Capital expenditure has more than doubled from $1,190m in FY2024, which is depressing free cash flow during the capacity build-out.
Enterprise value	Approximately $400.0bn (market cap $402.7bn plus total debt of approximately $6,544m, being long-term debt $5,245m and current debt approximately $1,299m, less cash and short-term investments $9,233m per the 26 Jul 2026 balance sheet). A further $5,268m of long-term investments is excluded from this calculation; netting those as well would give roughly $394.7bn.
52-week high	$739.67
52-week low	$154.47
Short interest (% of float)	1.80% (14.23m shares short against a float of 767.6m, settlement date 31 Jul 2026). Down 28.5% from 19.91m shares the prior month.
Days to cover	1.51 days
Dividend yield	Approximately 0.42% ($2.12 annualised against a $507.18 share price)

Context worth holding alongside these numbers: Applied at roughly $403bn now trades marginally below Lam Research at $415.9bn, having historically carried a premium to it, and at well under ASML's $708.3bn — despite Applied generating more revenue than either.

7. What Are They Building

Gate-all-around transistor tooling. Capacity additions in gate-all-around and FinFET structures drove record foundry-logic revenue in Q3 FY2026. Three product families launched on 10 February 2026 target this directly: Viva, a pure-radical treatment that smoothens silicon nanosheets at atomic precision; Sym3 Z Magnum, a conductor etch delivering angstrom-level trench-profile control; and Spectral, an atomic-layer deposition system replacing tungsten transistor contacts with molybdenum to cut contact resistance. A further pair followed on 8 April 2026 — Precision Selective Nitride PECVD and Trillium ALD for wrapping nanosheets in complex metal gate stacks.

Backside power delivery. One of the three named co-development targets for the EPIC Center alongside gate-all-around and advanced packaging. Moving power rails to the wafer backside cuts resistive loss and frees front-side routing; Applied is co-locating chipmaker engineering teams inside its own cleanroom to develop the process jointly.

Advanced packaging and hybrid bonding. Management describes Applied as the overall leader in this market with strong positions in high-bandwidth memory and 3D chiplet stacking, and expects packaging revenue to grow more than 70% in calendar 2026. Six systems launched on 25 June 2026 address DRAM and packaging specifically: Opta Quad CMP with in-polish wafer monitoring for hybrid bonding, Nokota VMax 2 electrochemical deposition for through-silicon-via fill and fine-pitch microbumps, Producer Avila 2 PECVD for stress-balanced dielectrics enabling 12- and 16-layer HBM stacks, Centura Prime Epi for selective source-drain doping, and the VeritySEM 7AP and SEMVision G7AP eBeam metrology and defect-review tools for thick, warped heterogeneous substrates.

Panel-level packaging. As accelerator packages outgrow round wafers, Applied is building a portfolio for larger rectangular panel formats spanning digital lithography, deposition, etch and eBeam review. The ASMPT NEXX acquisition announced on 3 May 2026 for $120m in cash was bought explicitly to broaden this, targeting an electrochemical deposition market of roughly $3.5bn.

The EPIC Center, Sunnyvale. The Equipment and Process Innovation and Commercialization Center is a $4–5bn investment with more than 180,000 square feet of cleanroom, described as the largest commitment to advanced semiconductor equipment research in US history. As at 13 August 2026 the first research tool was about to move into the cleanroom, with operations due to start in the coming months and a formal unveiling scheduled for 12 October 2026.

Manufacturing capacity. Applied is hiring and training to double quarterly system output from current levels by 2028, and is planning a further expansion to have the option to support additional demand by 2030. The $500m Tampines Campus in Singapore, announced 10 June 2026 and opened during Q3 FY2026, more than doubles cleanroom capacity there. A new class of "output innovation products" is in customer qualification, designed to raise wafers processed per square foot of cleanroom — a direct response to customers running out of floor space rather than tools.

8. Competitive Landscape

Semiconductor equipment is a set of near-monopolies rather than a single contested market. Applied competes with Lam Research and Tokyo Electron in deposition and etch, with KLA in process control, and with ASM International in atomic-layer deposition and epitaxy; it does not compete with ASML at all, since it makes no lithography scanners. Market capitalisations are as at the close of 14 August 2026 unless stated.

Peer	Market cap (August 2026)	Key 2025/2026 metric
ASML Holding (ASML)	$708.3bn	Q2 2026 net sales of €9,326m, up 21.2% year on year, with a 54.0% gross margin. FY2026 guidance has been raised twice, to €43–45bn from an original €36–40bn. Not a direct competitor — a lithography monopolist and a complementary supplier.
Lam Research (LRCX)	$415.9bn	FY2026 (to 28 Jun 2026) record revenue of $23.23bn, up 26% year on year from $18.44bn, with diluted EPS of $5.82, up 41%. The June quarter was its fourth consecutive record. Directly overlaps Applied in deposition and etch.
KLA Corporation (KLAC)	$266.2bn	FY2026 (to 30 Jun 2026) revenue of $13.58bn with GAAP net income of $4.83bn; record Q4 revenue of $3.66bn. Dominant in process control, the sub-market Applied expects to grow more than 50% in calendar 2026.
Tokyo Electron (8035.T)	$164.0bn (as at 7 Aug 2026)	FY2026 (to 31 Mar 2026) revenue of ¥2,443.5bn, up 0.5% year on year, with semiconductor production equipment sales of ¥1,775.4bn; guiding to roughly 40% growth in FY2027. Competes across coat-develop, etch and deposition.
ASM International (ASM.AS)	Trailing twelve-month revenue of $3.71bn as at July 2026; August 2026 market capitalisation not independently verified	Q2 2026 record revenue of €1,003m, its first quarter above €1bn and ahead of the €980m guidance midpoint, at a 51.9% gross margin and 33.0% adjusted operating margin, driven by ALD and epitaxy demand.

Applied's FY2026 revenue will land near $34.3bn on the nine months reported plus the Q4 guide, against Lam's $23.2bn and KLA's $13.6bn, so it remains comfortably the largest process-equipment company by revenue. Management's claim to grow faster than the market was repeated twice on the Q3 call, which is itself an indication that it is a contested point.

9. Insider Activity

President and Chief Executive Officer Gary E. Dickerson has led Applied Materials since September 2013 and was re-elected to the board at the annual meeting on 12 March 2026. Insider activity in 2026 is unusually concentrated and unusually clean-cut: heavy selling clustered into a two-week window in mid-to-late June, at prices between roughly $590 and $736, and effectively nothing since. Not one of the 30 Form 4s Applied filed in calendar 2026 carries the Rule 10b5-1 designation, and there were no open-market purchases by any insider. Selected filings below.

Name	Date	Type	Shares	Price	Value	Plan Type
Gary E. Dickerson (President and CEO)	30 Jun 2026	Open-market sale	19,970	$735.22	$14,682,343	Not under a Rule 10b5-1 plan
Gary E. Dickerson (President and CEO)	29 Jun 2026	Open-market sale	50,332	$700.21	$35,242,970	Not under a Rule 10b5-1 plan
Prabu G. Raja (President, Semiconductor Products Group)	18 Jun 2026	Open-market sale	10,000	$633.53	$6,335,300	Not under a Rule 10b5-1 plan
Gary E. Dickerson (President and CEO)	16 Jun 2026	Open-market sale, ten tranches	61,727	$590.52 to $599.35	Approximately $36,657,000	Not under a Rule 10b5-1 plan
Omkaram Nalamasu (SVP and CTO)	16 Jun 2026	Open-market sale, seven tranches	24,263	$591.53 to $596.52	Approximately $14,429,000	Not under a Rule 10b5-1 plan
Thomas J. Iannotti (Director)	16 Jun 2026	Open-market sale	9,250	$599.77	$5,547,872	Not under a Rule 10b5-1 plan
Timothy M. Deane (SVP, Applied Global Services)	15 Jun 2026	Open-market sale	8,621	$590.76	$5,092,984	Not under a Rule 10b5-1 plan
Prabu G. Raja (President, Semiconductor Products Group)	4 Jun 2026	Open-market sale, four tranches	50,000	$504.66 to $507.06	Approximately $25,264,000	Not under a Rule 10b5-1 plan
Brice Hill (SVP and CFO)	3 Jun 2026	Open-market sale	2,500	$498.86	$1,247,154	Not under a Rule 10b5-1 plan
Judy Bruner (Director)	25 Feb 2026	Open-market sale	2,500	$391.71	$979,275	Not under a Rule 10b5-1 plan
Brice Hill (SVP and CFO)	17 Feb 2026	Open-market sale	5,000	$361.21	$1,806,062	Not under a Rule 10b5-1 plan

Across 15 to 30 June 2026 Mr Dickerson disposed of roughly 151,000 shares for about $99m, cutting his beneficial holding from approximately 1,766,891 to 1,599,843 shares, a reduction of around 9.5%; that remaining position still includes 379,244 unvested performance and restricted stock units vesting between December 2026 and 2028. Nine non-executive directors received annual equity awards of 741 shares each on 12 March 2026, and separate gift transfers were recorded by Mr Dickerson (17,000 shares) and director Aart de Geus (17,855 shares); those are excluded from the table as they are not open-market disposals.

10. Key Risks

• Unresolved government investigations: Applied has disclosed subpoenas from the Department of Justice, the Bureau of Industry and Security and the Securities and Exchange Commission concerning China customer shipments and export-controls compliance, and stated that it continues to receive related subpoenas and requests for information. The BIS matter settled on 11 February 2026 for $252.5m, but the DOJ and SEC strands are not disclosed as resolved, and the 10-K warns of possible fines, penalties, restrictions on the business and reputational damage.
• China export controls and a shrinking China mix: China revenue has fallen from 37.2% of FY2024 to 30.1% of FY2025 to 28% in Q3 FY2026. Applied guided that the September 2025 expansion of the affiliates rule would cut FY2026 revenue by roughly $600m, and notes that foreign competitors remain able to serve Chinese customers it cannot. Management now expects China revenue to rise in calendar 2026 on 28nm foundry-logic investment, but that is a forecast rather than a result.
• Wafer fab equipment cyclicality and the risk of building into the peak: revenue is guided to rise from $6,800m in Q4 FY2025 to $10,250m in Q4 FY2026 while the company invests to double quarterly output by 2028, having added more than 1,500 heads in one quarter only months after cutting 1,400 roles. Inventories rose to $6,564m and receivables to $7,691m. Analysts already cite near-term gross-margin headwinds from accelerating capital expenditure and headcount expansion.
• Extreme customer concentration: two customers accounted for approximately 19% and 15% of FY2025 revenue, up from 12% and 11% in FY2024, and geographic disclosure points to Taiwan at 27% and Korea at 20% of recent quarterly revenue. The 10-K names the concentrated nature of the customer base as a specific risk factor. A single node-ramp deferral is a multi-billion-dollar event.
• Competitive share risk in deposition and etch: Lam Research grew FY2026 revenue 26% to $23.23bn with its June quarter up 30%, and ASM International set a record quarter on atomic-layer deposition and epitaxy. Both overlap Applied's core franchises directly, and Applied's own claim to grow faster than the market is the explicit test of whether it is holding share.
• Tariffs and Section 232 exposure: a 25% Section 232 tariff on certain advanced semiconductors took effect on 15 January 2026. The first phase imposed no direct tariff on semiconductor manufacturing equipment, but a possible second phase covering deposition systems, etch chambers and metrology tools has been flagged. Applied's own risk factors name new or increased tariffs and retaliatory measures, and China has already imposed retaliatory duties on US goods.
• Memory capital spending volatility: DRAM including HBM packaging grew 52% year on year and is now 26% of Semiconductor Systems revenue, with management guiding to a very significant further increase in the second half of calendar 2026. Memory capital expenditure is historically the most violent line in wafer fab equipment spending, and a memory pricing correction would hit the fastest-growing part of the mix first.
• Valuation against elevated expectations: the shares hit an all-time high of $739.67 in June 2026, fell roughly 20% into late July, and dropped a further 5% on 14 August 2026 despite beating on both revenue and earnings and raising guidance. At $507.18 the stock still trades near 40x guided FY2026 non-GAAP earnings, with insiders having sold roughly $160m into the June high and bought nothing.
• Geopolitical and Taiwan Strait concentration: Taiwan represented 27% of Q2 FY2026 revenue and Korea 20%, so close to half of revenue sits in two jurisdictions on China's periphery. The 10-K names geopolitical turmoil and supplier capacity as risk factors, and the plan to double output by 2028 raises dependence on the supply chain scaling in step. A regional disruption would hit demand and delivery simultaneously.

11. Recent Developments

• 11 Feb 2026 — Resolution reached with the US Department of Commerce for $252.5m. The Bureau of Industry and Security announced a civil settlement with Applied Materials and Applied Materials Korea over alleged unauthorised reexports of controlled equipment to a restricted Chinese entity; the penalty was twice the transaction value, the statutory maximum, and was recorded as a $253m charge in Q1 FY2026.
• 11 Feb 2026 — Samsung Electronics becomes the first chipmaker to join the EPIC Center. The anchor customer commitment for the Sunnyvale research facility.
• 12 Feb 2026 — Q1 FY2026 results. Revenue of $7,012m, down 2% year on year, with GAAP EPS of $2.54 and non-GAAP EPS of $2.38, alongside record DRAM revenue in Semiconductor Systems and record services and spares revenue.
• 10 Mar 2026 — Memory partnerships with SK hynix and Micron announced the same day. A long-term research partnership with SK hynix at the EPIC Center covering next-generation DRAM, HBM and 3D advanced packaging, and a partnership with Micron linking EPIC to Micron's Boise innovation centre.
• 13 Mar 2026 — Quarterly dividend raised 15% from $0.46 to $0.53 per share. The ninth consecutive year of increases, taking the annualised run-rate to $2.12 and more than doubling the payout over four years.
• 03 May 2026 — Acquisition of ASMPT's NEXX business for $120m in cash. Adds large-area electrochemical deposition and physical vapour deposition equipment, broadening the panel-level advanced packaging portfolio.
• 11 May 2026 — TSMC signs an EPIC Center innovation partnership. Arizona State University, Rensselaer Polytechnic Institute and Stanford were named inaugural academic research partners the same day.
• 14 May 2026 — Q2 FY2026 results. Record revenue of $7,910m, up 11%, with record GAAP EPS of $3.51 and record non-GAAP EPS of $2.86; the CEO raised the calendar-2026 semiconductor equipment growth forecast from over 20% to more than 30%.
• 10 Jun 2026 — $500m Tampines Campus announced in Singapore. More than doubles advanced cleanroom capacity there in support of the AI build-out; opened during Q3 FY2026.
• 25 Jun 2026 — Six new systems launched for DRAM and advanced packaging. Centura Prime Epi, Opta Quad CMP, Nokota VMax 2 ECD, Producer Avila 2 PECVD, VeritySEM 7AP and SEMVision G7AP.
• 11 Aug 2026 — UC Berkeley joins the EPIC Center as a research collaborator. The eleventh announced EPIC engagement.
• 13 Aug 2026 — Q3 FY2026 results: record revenue of $9,115m, up 25%. Record non-GAAP EPS of $3.50 and a record 34.0% non-GAAP operating margin, with Q4 guided to $10,250m and non-GAAP EPS of $4.02. The shares fell roughly 5% the following session on the China revenue mix decline and margin-headwind concerns from the capacity ramp.

12. Key Dates to Watch

• 20 Aug 2026 — ex-dividend date for the $0.53 quarterly dividend declared on 9 June 2026, per dividend data providers; verify against the company declaration
• 10 Sep 2026 — payment date for the $0.53 quarterly dividend
• 12 Oct 2026 — formal unveiling of the EPIC Center in Sunnyvale, California, confirmed on the Q3 FY2026 earnings call and timed to coincide with SEMICON West
• 13 Oct 2026 — Applied Materials investor breakfast at the Yerba Buena Center, San Francisco, with Gary Dickerson, Brice Hill and business-unit leaders in person and by webcast; the closest event to an analyst day on the calendar
• Expected late October 2026 — fiscal year 2026 closes; the prior year ended 26 October 2025
• Expected late October 2026 — Applied issues the press release confirming its Q4 FY2026 reporting date; the equivalent notice for Q3 came on 23 July 2026
• Expected November 2026 — Q4 and full-year FY2026 results. No date has been announced as at 15 August 2026; the three prior years reported on 13 November 2025, 14 November 2024 and 16 November 2023
• Expected November 2026 — the annual dividend review window, based on the pattern of increases announced each March and declarations made quarterly
• Expected February 2027 — Q1 FY2027 results, which management has flagged will cover a 14-week quarter with an outsized operating expense step-up
• Expected March 2027 — annual meeting of shareholders; the 2026 meeting was held on 12 March 2026
• TBC — completion or further disclosure on the Department of Justice and Securities and Exchange Commission export-controls investigations, which remain open

Discussion of Applied's results and the wider wafer fab equipment cycle continues on the ChartsView Forum, and price action around each of these dates can be tracked on Live Charts.

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