Applied Materials Forecast Gets Tepid Reaction After Stock Rally

Applied Materials Inc. forecast fiscal fourth-quarter revenue of approximately $10.3 billion and earnings of $4.02 a share, beating analysts' average estimates of $9.62 billion and $3.72, but shares fell about 3% in late trading as investors had already priced in strong growth. The Santa Clara, California-based company, the largest US maker of chip equipment, reported third-quarter sales rose 25% to $9.12 billion and earnings of $3.50 a share, exceeding projections of $9 billion and $3.42.

Bloomberg -- Applied Materials Inc. delivered an estimate-beating forecast that still got a lukewarm reaction from investors, a sign of the lofty hopes surrounding a company that's key to the AI boom. Most Read from Bloomberg - Walter Sells Lakers, Seeks More Cash to Pay Loans Amid DOJ Probe https://www.bloomberg.com/news/articles/2026-08-12/lakers-owner-walter-seeks-cash-to-pay-down-loans-amid-doj-probe?utm campaign=bn&utm medium=distro&utm source=yahooUS - Phoebe Gates Knew Phia Shopping App Took Credit for Sales It Didn't Drive https://www.bloomberg.com/news/articles/2026-08-11/phia-app-co-founders-pushed-for-features-taking-credit-for-sales-it-didn-t-drive?utm campaign=bn&utm medium=distro&utm source=yahooUS - Trump Pivots to Economic Squeeze of 'Entrenched' Iran Regime https://www.bloomberg.com/news/articles/2026-08-12/trump-reverts-to-economic-squeeze-of-entrenched-iranian-regime?utm campaign=bn&utm medium=distro&utm source=yahooUS Revenue will be approximately $10.3 billion in the fiscal fourth quarter, which runs through October, Applied Materials said in a statement Thursday. Though analysts estimated $9.62 billion on average, some projections were closer to $10 billion, according to data compiled by Bloomberg. Investors have embraced Applied Materials this year, betting that it will be a key winner in the AI economy. The company is the biggest US maker of chip equipment, making it central to a surge in demand for semiconductors. But after a rally that more than doubled the stock price, it's now harder for Applied Materials to meet expectations. The shares fell about 3% in late trading after the results were released. Last month, Applied Materials rival KLA Corp. also suffered a stock decline in the wake of its results. The results generally met analysts' estimates, but missed on free cash flow. Applied Materials is a barometer for chip-industry health because semiconductor makers buy its gear when they need to ramp up production. As the industry confronts shortages of memory chips and other components, Applied Materials customers such as SK Hynix Inc. and Micron Technology Inc. are racing to build new manufacturing facilities. Applied Materials, based in Santa Clara, California, makes tools used for dynamic random access memory, or DRAM. That's the key component in the high-bandwidth memory used by AI accelerators, the chips from Nvidia Corp. and others that help train artificial intelligence software. Earnings will be $4.02 a share in the fourth quarter, excluding some items, the company said. That compared with a projection of $3.72. Sales rose 25% to $9.12 billion in the third quarter, which ended July 26. Earnings increased to $3.50 a share, excluding certain items. Analysts had projected revenue of $9 billion and profit of $3.42 a share. Most Read from Bloomberg Businessweek - The Steamy, Magical and Now Very Lucrative Romantasy Business https://www.bloomberg.com/news/features/2026-08-12/romantasy-book-series-help-revive-interest-in-reading-push-into-tv-and-film?utm campaign=bw&utm medium=distro&utm source=yahooUS - The Midwest City Keeping the American Dream Alive for First-Time Homebuyers https://www.bloomberg.com/news/articles/2026-08-13/michigan-housing-market-offers-new-opportunities-for-first-time-buyers?utm campaign=bw&utm medium=distro&utm source=yahooUS ©2026 Bloomberg L.P.