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Live: Will Applied Materials Crush Tonight’s Q3 Earnings After 200% Rally?
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Quick Read
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AMAT guides for $8.95B revenue and $3.36 non-GAAP EPS, with CEO Gary Dickerson raising 2026 equipment growth above 30%.
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China supplied 27% of last quarter's revenue and remains the biggest wildcard despite a 94% Polymarket probability of a beat.
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Free cash flow collapsed 80% to $210 million against record revenue, putting AMAT's 50x P/E multiple under pressure.
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Applied Materials Faces High Expectations in Tonight's Q3 Earnings After Its 193% Rally
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Applied Materials enters tonight’s Q3 earnings with expectations running high. Management’s guidance calls for $8.95 billion in revenue and $3.36 in non-GAAP EPS, while its 2026 equipment growth outlook has been raised to more than 30%.
AI infrastructure, high-bandwidth memory, and Gate-All-Around transistor demand continue to power the AI-equipment supercycle.
However, free cash flow fell 80.21% last quarter due to working-capital pressure, while China, which is responsible for 27% of revenue, remains a major wildcard.
Polymarket traders assign a 94.1% probability that Applied Materials beats expectations. Yet with the stock soaring 193.05% over the past year, a simple beat is likely not what the market is pricing in. Analysts carry a consensus price target of $633.34, with 32 Buy ratings.
Applied Materials (NASDAQ:AMAT | AMAT Price Prediction) reports Q3 FY2026 after the market closes today at 4:00 PM ET. With shares up 113.83% year to date, investors are waiting to see the company’s guidance and commentary on China.
Last Quarter’s Backdrop
Last quarter, Applied Materials delivered $7.91 billion in revenue, up 11.41% YoY, and non-GAAP EPS of $2.86, a 6.56% beat. The company’s Semiconductor Systems segment margin expanded to 35.1% from 32.8%, and DRAM mix rose to 29% on HBM demand.
However, operating cash flow dropped 46.21% to $845 million. Shares have gained 24.58% since the May 14 filing, outpacing both SPY and QQQ.
Consensus Estimates
| Metric | Q3 FY26 Guide | YoY vs Q3 FY25 | FY25 Actual | FY26 Trajectory |
|---|---|---|---|---|
| Revenue | $8.95B | vs $7.302B | $28.368B | Equip. >30% growth |
| EPS (Non-GAAP) | $3.36 | vs $2.48 | $9.42 | Accelerating |
The midpoint implies a step change from the $7.302B that AMAT posted a year ago. Semi Systems is doing the heavy lifting, and the raised calendar-2026 target signals confidence in orders through year-end.
What I’m Watching Tonight: Margins, China, and AI Order Cadence
Tonight, I’ll be watching four things. First, Semi Systems’ operating margin. 35.1% set a new bar last quarter, and any give-back would sting given the stock’s current multiple. Second, DRAM and HBM mix. Management flagged HBM as the primary driver behind the DRAM step-up, and SK hynix, Micron, and Samsung are all named EPIC Center partners.
Third, the Gate-All-Around ramp. New tools, including Precision Selective Nitride PECVD and Trillium ALD, are tied to the 2nm transition at TSMC and others. Investors will also focus on order commentary tied to those platforms. Fourth, China. $2.087 billion came from China last quarter, and the $253 million BIS settlement earlier this year underscores export policy.
Free cash flow is another wildcard analysts will be watching. FCF of just $210 million against record revenue drew scrutiny, and Reddit debate on July 29 swung from a bullish score of 72 to bearish 32 within hours. Full-chain put/call sits at 1.02, hedged positioning.
Earnings History
| Quarter | EPS Surprise | 1-Day Move | 1-Week Move | 30-Day Move |
|---|---|---|---|---|
| Q2 FY26 | +6.56% | -5.28% | -1.02% | +35.8% |
| Q1 FY26 | +7.84% | +1.19% | +5.25% | -1.53% |
| Q4 FY25 | +2.36% | +1.19% | -0.88% | +9.85% |
| Q3 FY25 | +5.09% | +1.09% | +0.45% | +10.12% |
On average, shares moved roughly -0.21% one week after earnings over the past year, with recovery within 30 days.
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Thomas Richmond is a financial writer and content strategist with 5+ years of experience covering stocks and financial markets. He has published over 250 articles focused on individual stock analysis, helping investors better understand business fundamentals, stock valuations, and long-term opportunities.
Thomas previously served as a Content Lead at TIKR, a stock research platform, where he helped scale the company’s blog to hundreds of articles per month and contributed to a weekly newsletter reaching more than 100,000 investors.
He specializes in breaking down complex companies into clear, actionable insights for everyday investors, with a focus on fundamentals-driven research.
His work has also been featured on platforms including Seeking Alpha and Sure Dividend.
Outside of work, Thomas enjoys weight lifting and soccer.
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