Applied Materials (NASDAQ:AMAT) reported record fiscal second-quarter revenue on Thursday and issued third-quarter guidance ahead of Wall Street expectations, supported by continued heavy investment in artificial intelligence infrastructure and data centers that is driving demand for semiconductor manufacturing equipment.
AI Infrastructure Spending Continues to Boost Demand
The Santa Clara-based chip equipment maker said it expects current-quarter revenue of approximately $8.95 billion, with a margin of plus or minus $500 million. That forecast came in ahead of analyst expectations of $8.09 billion.
Although the stock initially moved higher in extended trading following the earnings release, shares later reversed direction and fell more than 3% in Friday premarket trading. Despite the decline, the stock has gained more than 71% since the start of the year.
Growing demand tied to AI technologies continues to benefit suppliers such as Applied Materials because manufacturing advanced AI semiconductors requires additional silicon wafers and more sophisticated production processes. Analysts had also expected strong DRAM-related demand to support the company’s results.
Revenue and Profit Top Expectations
Applied Materials generated quarterly revenue of $7.91 billion, marking an 11% increase from the same period last year and exceeding the consensus estimate of $7.68 billion.
“Applied Materials delivered record quarterly performance, and we now expect our semiconductor equipment business to grow more than 30 percent in calendar 2026,” said Gary Dickerson, President and CEO.
“The rapid global build-out of AI computing infrastructure combined with Applied’s strong leadership positions in leading-edge logic, DRAM and advanced packaging provide an exceptionally strong foundation for sustained, multi-year revenue and profit growth,” he added.
Adjusted earnings for the quarter reached $2.86 per share, also ahead of analyst forecasts of $2.68 per share.
Analysts See Further Upside Potential
Following the results, Goldman Sachs analyst James Schneider said Applied Materials shares “should continue to re-rate given strong guidance uplift and improving mix.”
“We believe many of the investor misconceptions that weighed on the stock in CY25 (such as perceived market share loss in China) should reverse themselves in CY26 as Applied benefits from mix-related tailwinds tied to increased spending on foundry/logic, DRAM, and advanced packaging,” he wrote.