Applied Materials Posts Record FY26, Forecasts Q1 Growth

Applied Materials delivered record fiscal year 2026 results, reporting $26.142 billion in revenue, a 14.9% increase over the prior year, signaling robust demand for its semiconductor equipment despite uneven global economic conditions. This performance, detailed in an 8-K filing today, underscores the company’s strength in serving the foundry and logic sectors, where revenue grew 58% and 63% respectively during the fiscal year.

The surge in revenue translated to a 35.5% operating margin for the Semiconductor Systems segment, up from 32.2% in fiscal year 2025, with operating income reaching $9.277 billion. This profitability was bolstered by a 54.9% gross margin, a slight increase from 53.2% the previous year, demonstrating improved efficiency in materials engineering and equipment production. Applied Global Services also contributed, with revenue reaching $6.901 billion and a non-GAAP operating margin of 29.5%, up from 26.9% in the prior year.

Looking ahead, Applied Materials projects first-quarter fiscal year 2027 revenue of approximately $11.1 billion, with non-GAAP diluted earnings per share (EPS) expected to be $4.35. This forecast, although presented with a +/- variance, indicates continued growth, even as broader macroeconomic signals suggest potential slowdowns in discretionary spending and IT sector performance; the company’s ability to navigate these conditions is central to sustaining its momentum.

While the company benefits from strong demand in key areas like foundry and logic, the broader operating environment remains complex. Recent media signals highlight margin compression among Indian consumer-facing companies—potential customers—and analyst concerns about slowing growth rates in sectors reliant on discretionary spending. However, Applied Materials’ focus on advanced manufacturing equipment, particularly supporting AI compute performance, positions it to capitalize on ongoing investment in critical technologies, as evidenced by its strong fiscal year 2026 results.