SANTA CLARA, Calif. — Applied Materials, Inc. (NASDAQ: AMAT) announced its financial results for the third quarter of fiscal 2026, which ended on July 26, 2026, revealing a landmark performance that underscores the company’s pivotal role in the global artificial intelligence (AI) infrastructure boom. The semiconductor equipment giant reported record-breaking quarterly revenue of $9.12 billion, marking a significant 25% increase compared to the same period last year.
Financial Highlights: A Record-Breaking Quarter
The company’s profitability metrics reached historic highs, propelled by the relentless demand for advanced materials engineering solutions. On a Generally Accepted Accounting Principles (GAAP) basis, Applied Materials achieved an operating income of $3.08 billion, representing an operating margin of 33.7%. The GAAP gross margin stood at 50.3%, with diluted earnings per share (EPS) reaching $3.17.
Non-GAAP performance was even more robust, with the company reporting record operating income of $3.10 billion (34.0% margin) and a record EPS of $3.50, reflecting a 41% increase year-over-year.
Applied Materials continues to demonstrate exceptional financial health, generating a record $3.04 billion in cash from operations. Committed to delivering value to its investors, the company returned $860 million to shareholders during the quarter, comprising $440 million in share repurchases and $420 million in dividends.
Strategic Momentum: Riding the AI Wave
Gary Dickerson, President and CEO of Applied Materials, highlighted the transformative impact of AI on the company's business model. "As the rapid global adoption of AI drives unprecedented demand for our materials engineering solutions, we are further raising our Semiconductor Systems revenue expectations for calendar 2026," Dickerson stated. He expressed strong confidence that the company would continue to grow faster than the overall market, buoyed by high demand visibility from major customers and sustained momentum heading into 2027.
The company’s growth is anchored in its leadership across several critical technology segments, including DRAM, leading-edge foundry-logic, and advanced packaging—all of which are essential for AI chip manufacturing. Brice Hill, Senior Vice President and CFO, noted that the company has achieved 13 consecutive quarters of year-over-year gross margin expansion, a testament to the increasing value Applied Materials delivers to chipmakers through improved manufacturing efficiency.
Future Outlook and Expansion
Beyond financial success, Applied Materials is aggressively expanding its R&D and manufacturing footprint. The company has expanded its "EPIC Center" R&D partnerships to 11 engagements, collaborating with industry leaders and academic institutions to accelerate innovation in materials and process technology. Furthermore, the company announced a $500 million investment to expand its Singapore Tampines Campus, a move designed to more than double its advanced cleanroom capacity to meet the projected demand for AI infrastructure through the end of the decade.
Looking toward the final quarter of fiscal 2026, the outlook remains bullish. Applied Materials projects total revenue to reach approximately $10.25 billion, with non-GAAP diluted EPS expected to be around $4.02. By diversifying its partnerships—including a recent joint development agreement with EssilorLuxottica for AR/smart eyewear technology—and reinforcing its core semiconductor manufacturing dominance, Applied Materials is positioning itself as a cornerstone of the future technological landscape.
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