Applied Materials (NASDAQ: AMAT) Posts Record Q3 Revenue of $9.12B, Raises Q4 Outlook

Applied Materials (NASDAQ: AMAT) reported record quarterly revenue of $9.12 billion for its fiscal third quarter ended July 26, 2026, up 24.8% year over year, with adjusted EPS of $3.50 beating the $3.45 consensus estimate. Shares fell -2.48% on Thursday, August 13, while the S&P 500 gained 0.70%.

Q3 FY2026 Results

• Revenue: $9.12 billion, up 24.8% from $7.30 billion in Q3 FY2025, a company record.
• Adjusted EPS: $3.50, up 41.1% year over year from $2.48, beating the $3.45 consensus by $0.05; GAAP EPS was $3.17, up 42.8% from $2.22.
• GAAP operating margin: 33.7%, up 3.1 percentage points year over year; adjusted operating margin 34.0%, up 3.3 percentage points.
• Operating cash flow: $3.04 billion; non-GAAP free cash flow of $2.33 billion.
• Shareholder returns: $860 million distributed, consisting of $440 million in share repurchases and $420 million in dividends.

What Drove the Results

Adjusted EPS of $3.50 beat the $3.45 consensus by 1.4%, and revenue of $9.12 billion exceeded analyst expectations. The Semiconductor Systems segment was the primary growth engine, with revenue of $7.04 billion versus $5.56 billion a year earlier, as the DRAM mix within that segment rose to 26% of segment revenue from 22% in Q3 FY2025. GAAP gross margin reached 50.3%, up 1.5 percentage points year over year, marking the company's 13th consecutive quarter of year-over-year gross margin expansion.

Applied Global Services contributed $1.78 billion in revenue, up from $1.46 billion, with segment operating margin expanding to 30.1% from 27.3%. The Other segment, which includes Display, posted an operating loss of $118 million versus a near-breakeven loss of $4 million in the prior-year period, a drag not fully offset by the gains elsewhere.

The company introduced six new chipmaking systems targeting DRAM and advanced packaging during the quarter, including the Opta Quad CMP system for hybrid bonding and the Nokota VMax 2 ECD for copper plating in next-generation packaging. Applied Materials also expanded its EPIC Center R&D program to 11 partnerships, adding Broadcom Inc., the University of California Berkeley, and SCREEN Semiconductor Solutions as new participants. A new US$500 million Tampines Campus in Singapore more than doubled the company's advanced cleanroom capacity in the country.

Wall Street View

Wall Street analyst consensus leaned strongly positive heading into the print, and the Q4 guidance above current-quarter results provides concrete support for continued coverage. The company separately raised its Semiconductor Systems revenue expectations for calendar 2026 and guided for another growth year in 2027, citing increased demand visibility from customers, particularly in DRAM, leading-edge foundry-logic, and advanced packaging.

Investor Takeaway

Applied Materials delivered record revenue and record adjusted EPS in Q3, yet the stock's -2.48% decline on the day suggests the market had priced in a more decisive beat relative to the magnitude of growth reported. The forward picture is the key data point: Q4 FY2026 guidance calls for revenue of $10.25 billion, plus or minus $500 million, and adjusted EPS of $4.02, plus or minus $0.20, which would represent a meaningful step-up from Q3 levels and is the figure investors will now anchor to. The explicit 2027 growth outlook from management, paired with the EPIC Center expansion and the Singapore capacity investment, frames Applied Materials as a company still investing heavily ahead of projected AI-driven semiconductor equipment demand through the end of the decade.