AI in action · Markets
Applied Materials: AI Lifted Its Revenue 53% to $10.4B
Applied Materials' fiscal fourth-quarter revenue rose 53% to a record $10.41 billion, it said on November 12, 2026, and it guided above forecasts.
The companies that sell the machines to make AI chips are having a better autumn than some of the companies that use the chips. Applied Materials, the largest US maker of semiconductor equipment, said after the close on Thursday, November 12, that revenue in its fiscal fourth quarter, the three months to October 25, rose 53% to a record $10.41 billion, according to Converge Digest. Adjusted earnings were $4.16 a share, up 92% and above the $4.05 analysts expected, Benzinga reported.
The machines that make chips did all the growing. Semiconductor Systems revenue rose about 64% to $8.00 billion, and its adjusted operating margin jumped to 39.0% from 29.6%. DRAM, the memory used alongside AI processors, rose to 33% of the segment's sales from 28% a year earlier, with foundry and logic chips at 58% and flash memory at 9%. Chief executive Gary Dickerson said that "AI continues to fuel strong incremental demand for semiconductors."
The outlook went further. For the first quarter of fiscal 2027, Applied guided revenue to $11.1 billion, plus or minus $500 million, against a consensus of about $10.89 billion, and adjusted earnings to $4.35 a share, up 83% from a year earlier. Revenue for the whole of fiscal 2026 reached $34.45 billion, up 21%, and quarterly free cash flow was a record $2.62 billion. The company returned more than $2.4 billion to shareholders in the quarter, including its largest buyback in more than eight years.
The market's reaction was less clear than the numbers. Applied shares fell 3.58% during Thursday's session ahead of the report, as small caps and parts of the chip sector sold off, and traded choppily after hours, according to Closing Look. Expectations for equipment makers have climbed with memory prices, and a beat that is merely good can disappoint when investors already price a strong upcycle.
The report matters beyond one company because equipment orders sit upstream of everything else. Chipmakers only buy tools when they expect to sell the chips two or three years out, so a supplier guiding higher into 2027 is a sign that memory makers and foundries are still committing capital even after the November sell-off. Signs of an AI slowdown, if they come, should show up here early.
Sources: Converge Digest — Applied Materials: AI chip demand drives 53% revenue growth; Benzinga — Applied Materials reports Q4 earnings, raises guidance as AI drives strong chip demand; Closing Look — Thursday, November 12, 2026