AMAT · Applied Materials, Inc.

Applied Materials delivered record second-quarter fiscal 2026 results, with $7.91 billion in revenue (+11% YoY) and $3.51 GAAP EPS (+33% YoY), reflecting robust demand across its core semiconductor systems business—particularly in foundry/logic (67% of segment revenue), DRAM (29%), and advanced packaging. Gross margin expanded 80 bps YoY to 49.9% GAAP and 50.0% non-GAAP, while operating margin rose 140 bps to 31.9% GAAP and 32.1% non-GAAP, indicating improved scale and operational leverage. Management attributed the strength to the global AI infrastructure build-out, citing leadership positions in leading-edge logic, DRAM, and advanced packaging as foundational to multi-year growth. The company raised its full-year semiconductor equipment growth outlook to “more than 30%” in calendar 2026. Forward guidance for Q3 FY2026 projects $8.95 billion in revenue (±$500M) and $3.36 non-GAAP EPS (±$0.20), implying continued acceleration despite a 80% YoY decline in non-GAAP free cash flow ($210M vs. $1,061M), likely due to elevated working capital investment and supply chain readiness initiatives—including increased inventory, logistics capacity, and build plans. Strategic execution was underscored by the announced acquisition of ASMPT’s NEXX business to strengthen panel-level advanced packaging, and deepening EPIC Center collaborations with TSMC, SK hynix, Micron, Advantest, and top-tier universities to co-develop energy-efficient AI chip technologies. The 15% dividend increase to $0.53 per share reinforces Applied’s commitment to returning capital amid sustained profitability and balance sheet strength.