Applied Materials jumps on earnings strength and bullish forecast tied to AI chip boom – News

Shares in Applied Materials Inc. jumped more than 12% in after-hours trading today after the semiconductor equipment maker reported earnings and revenue beats in its fiscal 2026 first quarter.

It also provided an outlook ahead of expectations thanks to increased demand for its chips driven by the ongoing artificial intelligence boom.

For the quarter that ended on Jan. 25, Applied Materials reported adjusted earnings per share of $2.38, no change from the first quarter of the previous fiscal year, on revenue of $7.012 billion, down 2% year-over-year. Both figures were ahead of the $2.21 per share and revenue of $6.87 billion expected by analysts.

Applied Materials generated $1.69 billion in cash from operations in the quarter and distributed $702 million to shareholders through $337 million in share repurchases and $365 million in dividends.

Business highlights in the quarter included the announcement that Samsung Electronics Co. Ltd. will join Applied Materials’s new EPIC Center in Silicon Valley, a facility intended to accelerate the transition of semiconductor technologies from early-stage research into high-volume manufacturing.

The EPIC Center is designed to shorten development cycles by enabling closer collaboration between chipmakers, materials suppliers and equipment engineers working on next-generation process technologies.

The company also introduced new deposition, etch and materials modification systems that are aimed at improving the energy efficiency and performance of Gate-All-Around transistors and advanced interconnects at the two-nanometer node and beyond.

“Applied Materials delivered strong results in our fiscal first quarter, fueled by the acceleration of industry investments in AI computing,” Chief Executive Gary Dickerson said in the company’s earnings release. “The need for higher performance and more energy-efficient chips is driving high-growth rates for leading-edge logic, high-bandwidth memory and advanced packaging. These are areas where Applied is the process equipment leader, and we expect to grow our semiconductor equipment business over 20% this calendar year.”

The last line — Dickerson saying that the company expects to grow its semiconductor equipment business by more than 20% — foretold an outlook that also impressed.

For its fiscal 2026 second quarter, Applied Materials expects adjusted earnings per share of $2.24 to $2.84 on revenue of $7.165 billion to $8.150 billion, the latter well ahead at the midpoint of the $7 billion expected by analysts.

Photo: Applied Materials