Applied Materials (AMAT) Stock Slides 5% After Earnings Weren’t Quite Enough

TLDR

• Applied Materials reported adjusted EPS of $3.50, beating the $3.40 consensus estimate, with revenue of $9.12 billion vs. the $9 billion forecast.
• GAAP earnings came in at $3.17 per share, missing estimates, partly due to a $220 million unrealized investment loss.
• The stock fell 4.9% to $508.30 in Friday premarket trading.
• Q4 guidance came in well above expectations: revenue of $10.25 billion vs. the $9.55 billion analyst forecast.
• DRAM accounted for 26% of semiconductor systems revenue in Q3, up from 22% a year ago.

Applied Materials (AMAT) dropped 4.9% to $508.30 in Friday premarket trading after its fiscal third-quarter results failed to excite investors, even as the numbers topped Wall Street estimates.

Applied Materials, Inc., AMAT

Adjusted EPS came in at $3.50, up from $2.48 a year ago and ahead of the $3.40 analyst consensus per FactSet. Revenue grew 25% year over year to $9.12 billion, beating the $9 billion forecast.

On a GAAP basis, however, earnings were $3.17 per share, falling short of estimates. A $220 million unrealized investment loss was the main drag on the headline number.

APPLIED MATERIALS $AMAT Q3’26 EARNINGS HIGHLIGHTS

🔹 Revenue: $9.12B (Est. $8.99B) 🟢; +25% YoY
🔹 Adj. EPS: $3.50 (Est. $3.39) 🟢; +41% YoY
🔹 Non-GAAP Oper Income: $3.10B (Est. $3.03B) 🟢
🔹 Non-GAAP FCF: $2.33B (Est. $1.52B) 🟢; +14% YoY

Q4 Guide:
🔹 Revenue: $10.25B +/-…

— Wall St Engine (@wallstengine) August 13, 2026

The stock had already taken a beating in July, tumbling 30%. Even with Friday’s drop, AMAT is still up 108% for the year.

The bar was always going to be high. Applied Materials has been a direct beneficiary of rising capital spending on AI processors and memory chips, and markets had priced in strong execution.

Q4 Guidance Blows Past Expectations

For fiscal Q4, Applied Materials guided for revenue of $10.25 billion, plus or minus $500 million. That’s well above the $9.55 billion analysts had penciled in.

Adjusted EPS guidance of $4.02 per share, plus or minus 20 cents, also topped the $3.71 analyst estimate by a wide margin.

Despite the strong forward guidance, the market wasn’t in a forgiving mood on Thursday evening.

DRAM Demand Continues to Climb

DRAM made up 26% of semiconductor systems revenue in Q3, up from 22% a year ago. Foundry and logic equipment still make up the bulk of Applied Materials’ systems business.

AI-driven demand for memory capacity is expected to keep growing, and Applied Materials is well positioned to serve that market.

The company reported alongside close rivals KLA Corp. and Lam Research, both of which posted strong quarters. All three are competing for position in the DRAM equipment space as capacity expansions ramp up.

Applied Materials’ results also landed during a busy week for AI-linked earnings. Cloud provider CoreWeave, AI server maker Supermicro, and AMAT were among the key names reporting this week.

S&P 500 earnings for Q2 are on pace to rise 50% year over year according to FactSet, the highest growth rate since 2021, with AI cited as the primary driver by Bank of America strategists.

Nearly 90% of S&P 500 companies have now reported for the quarter.

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