Applied Materials Guides Fourth-Quarter Revenue To $10.25 Billion

Applied Materials (AMAT) guided revenue for its fiscal fourth quarter of 2026 to $10.25 billion, plus or minus $500 million, on August 13. This outlook represents a 14.5% increase over the company's fiscal third-quarter guide of $8.95 billion. Despite the higher forecast, the stock has underperformed the S&P 500 since the release, falling 4.3% against the index's 2.0% loss.

Management attributed the revenue increase to strong customer demand, noting that clients have found new ways to address clean room space constraints. In its fiscal third-quarter 2026 earnings call, the company stated that customers have significantly increased their demand for tool deliveries and now want more tools delivered in 2026. The fourth-quarter guide is the first outlook for that period and replaces no earlier forecast.

While revenue guidance rose, non-GAAP gross margin remained flat at approximately 50.4%, matching the third-quarter actual figure. Management cited ramp costs built into the forecast as the reason for the static margin. No other metrics in the release were guided lower.

The stock's price action following the announcement was sharp. Applied Materials shares fell 5.1% on August 14, while the S&P 500 slipped only 0.2%. Investors appeared to price in both the reported quarter and the outlook in that single session. As of the September 30, 2026 close, the stock stood at $511.38. This price is still below the level from before the release, meaning the company has not fully recovered the loss from the August 14 drop.

Technical indicators suggest an intact uptrend despite the recent weakness. The September 30 close was 4.8% above the 50-day moving average and 20.6% above the 200-day moving average. The 50-day average was above the 200-day average, a pattern typically associated with an uptrend. The 50-day average stood at $487.82 on September 30, approximately $24 below the closing price. The uptrend would be considered broken if the stock closes below this level.

Growth drivers remain concentrated in specific semiconductor segments. DRAM revenue, which includes some packaging, grew 52% year-over-year in the third quarter. Management forecasts that packaging revenue will grow more than 70% in calendar 2026. For fiscal year 2027, management indicated that clean room space availability will determine shipment limits. While quarter-over-quarter growth is expected for the first quarter of fiscal 2027, no specific guide was provided.

The company's next earnings report will test whether fourth-quarter revenue meets or exceeds the $10.25 billion midpoint, a figure already above the record $9.1 billion reported for the third quarter.