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Applied Materials heads into Q4 earnings tonight with investors looking for reassurance that the AI semiconductor spending boom still has room to run.
Shares have fallen 21.24% over the past month, raising the stakes for management’s 2027 outlook.
Here’s what investors are watching:
Quick Read
Trading at roughly 34x earnings, Applied Materials needs to convince investors that AI-driven semiconductor investment remains a multiyear opportunity.
A strong quarter paired with bullish 2027 guidance could help reverse the recent selloff. But cautious commentary on capacity expansion or clean-room constraints could give investors another reason to sell.
This article is updated throughout the trading day. Check back for more.
Applied Materials (NASDAQ: AMAT | AMAT Price Prediction) is expected to report fiscal fourth-quarter 2026 results today at around 4:00 PM ET. The chip equipment leader guided to its strongest growth of the year, and its stock has been sliding since August. That makes its 2027 commentary the key number tonight.
Fiscal Q3 revenue reached $9.115B, up 24.83% year over year. Non-GAAP EPS of $3.50 exceeded estimates by 3.11%. Semiconductor Systems non-GAAP operating margin expanded to 38.0% from 33.2%, and free cash flow came in at $2.330B.
Shares stood at $552.70 when the company filed its Q3 report and now trade near $391.86, though they remain up 53.02% year to date. On the Q3 call, CEO Gary Dickerson raised the calendar 2026 Semiconductor Systems outlook and said: “Based on the increased demand visibility we are receiving from our customers, we expect another strong growth year for Applied Materials in 2027.”
| Metric | Q4 FY2026 Estimate | YoY Change | FY2026 Estimate | FY2027 Estimate |
|---|---|---|---|---|
| Revenue | $10.30B | +51.46% | $34.25B | $46.38B |
| EPS (Normalized) | $4.0558 | +86.90% | $12.7938 | $18.5565 |
Consensus sits slightly above the midpoint of company guidance of $4.02 +/- $0.20. The Q4 EPS estimate rose from 3.6446 90 days ago but had two down revisions over the last 30 days. FY2027 estimates collected five up revisions in that window, so the outlook for next year carries more weight than tonight’s quarter.
My first focus tonight will be on Semiconductor Systems. Management guided that segment to around $7.9 billion, up 62%, after Q3 DRAM revenue grew 52% to a record.
Packaging is the second catalyst. Applied estimated packaging revenue growth above 70% in calendar 2026, with process diagnostics and control exceeding 50%.
Margins deserve close attention. The Q4 gross margin guide is about 50.4%, with operating expenses near $1.58 billion. Display-heavy Other revenue of roughly $510 million weakens the mix, and that segment’s operating loss widened to $118M from $4M in Q3.
Capacity will be important for framing 2027. CEO Gary Dickerson warned that “clean room availability at a high level will determine what we can ship next year.” China is also worth watching after its share fell to 28% from 35% amid export controls.
| Quarter | EPS Surprise | Earnings-Day Move | 1-Day Move | 7-Day Move | 30-Day Move |
|---|---|---|---|---|---|
| Q3 FY2026 | +3.11% | -5.12% | +5.55% | -2.93% | -18.1% |
| Q2 FY2026 | +6.56% | -0.89% | -5.28% | -1.02% | +35.8% |
| Q1 FY2026 | +7.84% | +8.08% | +1.19% | +5.25% | -1.53% |
| Q4 FY2025 | +2.36% | +1.25% | +1.19% | -0.88% | +9.85% |
On average, shares moved 0.105% seven days after earnings over the past year.
Contact [email protected] for any questions or corrections.
Thomas Richmond is a financial writer and content strategist with 5+ years of experience covering stocks and financial markets. He has published over 500 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.
Outside of work, Thomas enjoys weight lifting and soccer.
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