The chip equipment maker grew revenue 25% year over year and guided higher for the fourth quarter on AI infrastructure demand
Applied Materials just had its biggest quarter ever. The chip equipment giant reported fiscal third-quarter 2026 revenue of $9.12 billion, a record and a 25% jump from $7.30 billion a year earlier.
Inside the record quarter
The core of the business is the Semiconductor Systems segment. That is the unit selling the equipment chipmakers use to deposit, etch and shape materials on silicon wafers.
Semiconductor Systems brought in a record $7.04 billion, up 27% year over year.
Demand came from three areas: advanced logic, DRAM and advanced packaging.
Applied Materials expects advanced packaging revenue to grow more than 70% in calendar 2026.
Profits rose faster than sales. Non-GAAP earnings per share hit a record $3.50, up 41% from the prior year. On a standard accounting basis, GAAP net income came in at $2.54 billion, up 43%.
The non-GAAP gross margin landed at 50.4%, and the non-GAAP operating margin reached 34%.
Services and the guidance bump
Applied Global Services, which handles maintenance, parts and upgrades for installed equipment, grew 22% to $1.78 billion.
For the fourth quarter of fiscal 2026, Applied Materials expects revenue of approximately $10.25 billion, plus or minus $500 million. It also guided to non-GAAP EPS of about $4.02, plus or minus $0.20. Both targets came in above prior analyst expectations.
Management also raised its Semiconductor Systems revenue outlook for calendar 2026. CEO Gary Dickerson pointed to demand visibility stretching into 2030, which he described as unprecedented.
What this means
China accounted for approximately 26% to 28% of revenue in recent quarters, representing a significant share for a company selling strategically sensitive technology.
