Applied Materials Earnings: Record $10.4B Quarter on AI Chip Demand

Applied Materials earnings for the fiscal fourth quarter set a record: revenue rose 53% from a year earlier to $10.41 billion, and adjusted profit came in at $4.16 a share, up 92%, the company said on Thursday, November 12. Both figures beat Wall Street's estimates of $10.3 billion and $4.06, according to an Associated Press summary of Zacks data.

The company is one of the world's largest suppliers of the machines that make chips, so its order book is an early read on how much AI capacity the industry intends to build. Its forecast says the building is speeding up. The stock's reaction was small, and that is part of the story too.

$10.41B

Fourth-quarter revenue, up 53% from a year earlier

$4.16

Adjusted earnings per share, up 92%

$11.1B

Revenue forecast for the current quarter, plus or minus $500 million

30%+

Growth management expects in chip equipment demand in 2027

Applied Materials earnings by the numbers

Semiconductor Systems, the unit that sells manufacturing tools, brought in $8.0 billion, up from $4.88 billion a year earlier. Applied Global Services, which maintains and upgrades installed machines, added $1.9 billion. On standard accounting, earnings were $3.40 a share, up 43%.

Memory was the fastest-moving piece. DRAM, the memory type used in AI servers, made up 33% of systems revenue, up from 28% a year earlier, while foundry and logic accounted for 58%, the company's release shows. For the full fiscal year, revenue rose 21% to $34.45 billion and adjusted earnings rose 37% to $12.89 a share.

The forecast for the quarter now under way also topped expectations. Applied guided to revenue of about $11.1 billion and adjusted earnings of about $4.35 a share. Analysts were looking for $10.84 billion and $4.25, according to Investing.com.

What management said about AI demand in 2027

On the earnings call, chief executive Gary Dickerson said the company's current view is that demand for wafer fab equipment will rise more than 30% next year, and that Applied expects to grow faster than the market again, according to the call transcript published by The Motley Fool and a MarketBeat summary.

Chief financial officer Brice Hill tied that view directly to AI. He said cloud capital spending is expected to rise more than 50% in 2027 to well over $1 trillion, according to the transcript. That is management's expectation, not a reported figure, and it sits above the totals we worked through in AI Capex in 2026.

The limit, executives said, is physical space. Clean-room availability is the main constraint over the medium term, and Applied is tracking more than 20 factory ramps and line expansions in 2027. The company plans to double its systems output from fourth-quarter levels by 2028.

China's share of sales keeps shrinking

China accounted for 25% of fourth-quarter revenue, or $2.64 billion, down from 29% a year earlier, the release shows. For the full year it was 27%, against 30% in fiscal 2025. Hill said he expects China to be less than 25% of the business in 2027 even as sales there grow, MarketBeat reported. Taiwan was the largest region in the quarter at 28% of revenue, and Korea was 17%.

Why the stock barely moved

Applied shares closed at $380.95 on Thursday, down 3.6%, before the results came out. That was the session in which Jensen Huang resigned as Nvidia's chief executive and chip stocks swung sharply. After the report the stock traded roughly 1.5% higher in extended trading, according to Investing.com.

Much good news was already in the price. The shares had risen 48% since the start of the year, against 11% for the S&P 500, the Associated Press noted. Applied used the strength to return cash: it bought back $2.0 billion of stock, which Hill called the largest quarterly share buyback in more than eight years. The largest AI spenders have gone the other way, as we reported in Big Tech Stock Buybacks Fall 83%.

What the AI Bubble Index says

The AI Bubble Index read 62.0 after Thursday's close, in its Normal band, against 62.7 a week earlier. Sentiment and attention is the hottest of the five families at 97.5. The demand family is the coolest at 40.7, and Fragility, at 68.8, sits above Euphoria at 62.7. Each family is tracked on the dashboard.

Equipment orders are a real-economy signal, and this report shows spending commitments still rising. It does not show whether that spending will earn a return. Tool makers are paid when factories are built, well before anyone knows if the chips those factories produce will find paying uses. Our guide to AI investment risks explains why supplier revenue is a lagging test of an investment boom, and AMD's results earlier this month showed the same strong demand at the chip level.