Thursday Night's Big Print: Applied Materials Guided to $10.25 Billion and Shares Still Fell After the Bell

by Henry Nakamura · August 14, 2026

Earnings Reporter, Earnings Dispatch

Applied Materials (Nasdaq: AMAT) released fiscal third-quarter 2026 results at 4:01 p.m. ET on Thursday, August 13 — after the close, making it the largest genuinely after-hours report of the session. Revenue was $9.115 billion, up roughly 25% year over year. GAAP earnings were $3.17 per share and non-GAAP earnings were $3.50. Benzinga's comparison put consensus at about $8.99 billion of revenue and $3.40 of adjusted EPS, so the company cleared both.

Margins were tight between the two bases, which is unusual and makes the quarter easy to read: GAAP gross margin was 50.3% and non-GAAP gross margin 50.4%; GAAP operating margin was 33.7% and non-GAAP operating margin 34.0%. Segment revenue split into $7.040 billion at Semiconductor Systems, $1.781 billion at Applied Global Services and $294 million in the Other segment, which is where the company reports Display. The company returned $860 million to shareholders in the quarter, $440 million through buybacks and $420 million through dividends.

The guidance was the headline. Applied Materials guided fiscal fourth-quarter revenue to $10.25 billion, plus or minus $500 million, and non-GAAP diluted EPS to $4.02, plus or minus $0.20. Benzinga put the consensus for the quarter at roughly $9.54 billion of revenue and $3.69 of adjusted EPS. On the call, Chief Financial Officer Brice Hill described the range as up 51% year over year, saying: "We expect company revenue of $10.25 billion ± $500 million, which is up 51% year-over-year."

Chief Executive Gary Dickerson used the release to raise the calendar-year framing. "Applied Materials delivered another record-breaking quarter, including the highest sequential revenue growth in the company's history," he said. "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 and are confident we will grow faster than the market this year. Based on the increased demand visibility we are receiving from our customers, we expect another strong growth year for Applied Materials in 2027."

Then the stock went down. Applied Materials had already closed the regular session at $534.54, off 2.48% from Wednesday's $548.15 close. In extended trading it fell to $506.51, a decline of 5.24% from the close, per Investing.com's account of the after-hours reaction; stockanalysis.com showed the shares at $507.70, down 5.02%, as of 7:59 p.m. ET. Extended-hours prices move, and neither figure is a settled Friday open.

The explanation on offer from the call is margin, not demand. Investing.com reported that management guided company-level gross margin roughly flat in the fourth quarter despite the large sequential revenue step-up, with Hill pointing analysts toward ramp costs tied to aggressive hiring and capacity expansion as the reason near-term margin improvement is constrained. In other words, the incremental revenue is arriving faster than the cost structure carrying it can be leveraged.

That reading sits awkwardly next to the company's own margin record. In the release, Hill noted a long streak of improvement. "Applied Materials achieved its 13th consecutive quarter of year-over-year gross margin expansion, demonstrating the increasing value we create by enabling better chips, systems and fab returns," he said. "We expect continued strong revenue growth in the second half of the calendar year, particularly in DRAM as well as leading-edge foundry-logic and advanced packaging."

The demand detail underneath the quarter was specific. Hill told analysts that DRAM revenue, which includes high-bandwidth memory packaging, grew 52% year over year to record levels. Dickerson said the company now expects overall packaging revenues to grow more than 70% in calendar 2026. On the supply side, Dickerson framed the environment bluntly in prepared remarks: "As AI computing drives unprecedented demand for semiconductors, there is a large gap between demand and supply for advanced chips."

Geographic mix moved in a direction that has been a live question for the sector. Hill said China represented 26% of combined Semiconductor Systems and Applied Global Services revenue in the quarter and added that the company now expects China revenue to increase this calendar year, led by investments in 28-nanometer foundry-logic. That is a reversal of the direction of travel that dominated the equipment-maker narrative through much of the prior year.

Hill also flagged capacity spending stretching well past the current cycle, saying the company is "making additional manufacturing capacity investments to support projected demand through the end of the decade." Investing.com's account of the Q&A noted management stopped short of putting a specific growth number on 2027, citing variable clean room availability as the constraint — confidence in direction without a figure attached to it.

Some context on the size of the after-hours reaction: the shares had already had a very large run into the print, and Thursday's regular session decline of 2.48% came on a day when the broad market rose. The S&P 500 closed at a record 7,798.99, up 0.65%, and the Nasdaq Composite closed at 26,803.03, up 0.81%, according to the Associated Press. The index traded above 7,800 intraday but did not close there.

Applied Materials was one of only two significant after-close reporters on Thursday, alongside Globant, per Kiplinger's calendar for the August 10–14 week — and Friday's before-the-open slate is among the lightest of the week. That makes the Applied Materials reaction the main thing carrying into Friday's open, and it makes the fourth-quarter gross margin line, rather than the $10.25 billion revenue midpoint, the number to check when the company reports next.