AMAT changes
Pick any two versions below to diff them.
- Price
- $416.00
- Discount category
- Below intrinsic value
- Next earnings
- 2026-11-12
- Next earnings is estimate
- No
- Company name
- Applied Materials
- Sector
- Semiconductor equipment
- About
- Applied Materials makes the equipment that chipmakers use to deposit, etch, change and measure the thin layers of material on silicon wafers. It has two segments. Semiconductor Systems sells equipment for foundry and logic, DRAM and flash memory chips, and for advanced packaging. Applied Global Services sells spare parts, upgrades and services for the installed base of equipment. A smaller display business is in its Other category. In Q3 fiscal 2026, which ended on July 26, 2026, Semiconductor Systems had revenue of $7.04 billion and Applied Global Services had revenue of $1.78 billion. Its fiscal year ends on the last Sunday of October.
- Thesis
- The market prices Applied Materials as a cyclical supplier whose record results depend on a peak in chip equipment spending. AI demand drove record revenue of $9.12 billion in Q3 fiscal 2026, and the company expects another strong growth year in 2027. But chipmakers can cut equipment orders quickly, as they did in past cycles. China gave 28% of Q3 revenue, and U.S. export rules can lower these sales further. A U.S. rule that extends export limits to companies that listed parties own is suspended only until November 2026. For the gap to close, three things must be true. Sales for DRAM, leading-edge logic and advanced packaging must grow more than sales to China fall. Gross margin must keep rising, as it did year over year for 13 quarters in a row to Q3 fiscal 2026. The outlook for fiscal 2027 must confirm growth after the strong year of 2026. The Q4 fiscal 2026 report on November 12, 2026, with the first view of fiscal 2027, is the next test. If these checks pass, the gap can close over the next four to six quarters. The main reason it may not close is a fall in chip equipment spending, which can lower revenue and margins at the same time.
- Risks
- Chip equipment spending is cyclical. Record revenue in 2026 depends on AI spending by chipmakers and their customers. If AI spending or memory prices fall, chipmakers can cut orders quickly, and revenue and margins can fall together. China gave 28% of revenue in Q3 fiscal 2026. U.S. export rules already limit sales to many Chinese customers, and the government can add more limits. A rule that extends these limits to companies that listed parties own is suspended only until November 2026. The 2026 settlement with the U.S. Department of Commerce requires export compliance audits for three years. If Applied does not meet these terms, the suspended denial order can take effect and stop some exports. A small number of large chipmakers in Taiwan, Korea, the United States and China buy most of the equipment. A delay of one large factory project can lower revenue for several quarters. China controls the export of rare earth minerals that some Applied products use. More controls can delay parts and raise costs.
- Balance sheet
- Cash: $9.2B Debt: $6.6B Net cash: $2.6B Interest cover: 45× Undrawn credit line: $2.0B, to February 2030 Debt due within 12 months: $1.3B Last debt due: 2050 Applied Materials has more cash and investments than debt. At July 26, 2026, cash and cash equivalents were $7.04 billion and short-term investments were $2.20 billion. Long-term investments of $5.27 billion, which include strategic stakes such as Besi, are not in the cash figure. Debt is $6.50 billion of senior unsecured notes due from 2027 to 2050 and $100 million of commercial paper. The $1.20 billion of 3.342% notes due in 2027 are now current debt. Interest cover is GAAP operating income divided by interest expense for Q3 fiscal 2026. The $2.0 billion five-year revolving credit facility runs to February 2030, and a $2.0 billion 364-day facility is also in place; neither had borrowings. Free cash flow was $2.33 billion in Q3 fiscal 2026 and $3.58 billion in the first nine months, after capital spending of $1.99 billion. In Q3, the company paid $440 million for share buybacks and $420 million for dividends. About $12.8 billion of buyback authorization was left at July 26, 2026. As of 2026-07-26.
- Checkpoints
- Nov 12, 2026: Q4 fiscal 2026 results and fiscal 2027 outlook. Pending. Watch: Revenue near the $10.25 billion guidance and a view of strong growth in fiscal 2027 pass; revenue below the range or a weaker 2027 view fail. Nov 2026: U.S. export rule for affiliates of listed parties. Pending. Watch: An extension of the suspension or no new loss of China sales passes; a return of the rule that cuts sales to more Chinese customers fails. Q4 2026 (estimate): Besi stake of about 20%. Pending. Watch: The share purchase closes after the U.S. antitrust waiting period and the partnership in hybrid bonding grows; a block or a cancelled purchase fails.
- Recent events
- 2026-10-26: Applied Materials agreed to buy more shares of BE Semiconductor Industries (Besi), a maker of chip assembly equipment, including hybrid bonding. With its existing stake from April 2025, it will own about 20% of Besi. The purchase must first clear the U.S. antitrust waiting period. Applied said that it does not intend to buy more than about 20% or to ask for a board seat. 2026-10-22: Applied Materials said that it will hold its Q4 fiscal 2026 earnings call on November 12, 2026, at 4:30 p.m. ET. 2026-08-27: Applied Materials added Akash Palkhiwala, the CFO and COO of Qualcomm, to its board of directors and its audit committee. 2026-08-13: Applied Materials reported Q3 fiscal 2026 results. Revenue was a record $9.12 billion, up 25%. GAAP EPS was $3.17, and non-GAAP EPS was a record $3.50, up 41%. Non-GAAP gross margin was 50.4%. China gave 28% of revenue, down from 35% a year earlier. The company raised its view of 2026 revenue for Semiconductor Systems and said that it expects another strong growth year in 2027. It guided Q4 fiscal 2026 revenue of $10.25 billion, plus or minus $500 million, and non-GAAP EPS of $4.02, plus or minus $0.20. 2026-05-14: Applied Materials reported Q2 fiscal 2026 results. Revenue was a record $7.91 billion, up 11%, and non-GAAP EPS was a record $2.86. The company said that it expects its semiconductor equipment business to grow more than 30% in calendar 2026. It raised the quarterly dividend by 15% to $0.53 per share. 2026-02-12: Applied Materials reported Q1 fiscal 2026 results. Revenue was $7.01 billion, down 2%, with record DRAM revenue. Non-GAAP EPS was $2.38, flat from a year earlier. 2026-02-11: Applied Materials agreed to pay $252.5 million to the U.S. Department of Commerce to settle claims that some shipments to China from November 2020 to July 2022 did not follow U.S. export rules. The Department of Justice and the SEC closed their related investigations without action. The settlement includes internal audits and a denial order that is suspended and will be waived after three years if the audits are complete. 2025-11-13: Applied Materials reported Q4 fiscal 2025 results. Revenue for fiscal 2025 was a record $28.37 billion, up 4%, and non-GAAP EPS was a record $9.42. The company said that it expects higher demand from the second half of calendar 2026.