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Key Takeaways
- Applied Materials saw profit jump more than 70% in the latest quarter, as demand for advanced, energy-efficient chips used in AI data centers continues to rise.
- The company expects its semiconductor equipment business to grow more than 20% this year.
Wall Street is excited about Applied Materials’ quarterly profits.
Shares of Applied Materials (AMAT) were recently up 9% after the maker of semiconductor manufacturing equipment said profit soared more than 70% to $2.03 billion, or $2.45 a share, in the first quarter of its 2026 fiscal year. Revenue declined 2% to $7.01 billion.
“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,” CEO Gary Dickerson said in a press release. Dickerson said demand in those areas should help Applied Materials grow its semiconductor equipment business by more than 20% this year.
Why This Matters
The rapid build-out of AI data centers is boosting demand for chips and the specialized tools needed to make them. Applied Materials and other equipment makers are now at the center of the AI investment cycle.
The AI data center buildout has caused a spike in demand for more powerful, energy-efficient semiconductors. That’s been a boon to companies like Applied Materials whose equipment and processes enable the fabrication of said chips.
Dickerson expects demand to remain strong through this year, when he estimates global semiconductor industry revenues will hit $1 trillion.
Applied Materials on Friday forecast current-quarter revenue will come in between $7.15 billion and $8.15 billion, with adjusted earnings per share of between $2.44 and $2.84. The upper-end of those ranges would represent double-digit growth on both metrics.
Applied Materials stock was already flying high heading into Friday’s report, with shares up nearly 28% since the start of the year. As of Friday afternoon, the stock is up about 95% in the last 12 months.
The company was in the news earlier this week when the Department of Commerce announced Wednesday that Applied Materials will owe a $252 million penalty due to exporting chipmaking equipment illegally to a company in China.
