AI Chip Expansion Continues, Applied Materials (AMAT.US) Q1 Revenue Guidance Exceeds Expectations

According to Golden Ten Data, Applied Materials (AMAT.US) released its financial results for the fourth quarter and full year of fiscal 2026 after the market closed on Thursday. The financial report shows Q4 revenue of $10.41 billion, an increase of approximately 53% year-on-year, exceeding market expectations of about $10.3 billion; adjusted earnings per share were $4.16, up about 92% year-on-year and higher than the expected $4.06.

Driven by the expansion of AI chip production, the core Semiconductor Systems business recorded Q4 revenue of $8 billion, a year-on-year increase of 64%. The company forecasts that revenue for the first quarter of fiscal 2027 will exceed Wall Street expectations, and it bets that strong demand for advanced AI chips will continue to drive its spending on semiconductor manufacturing equipment.

For the full year, the company reported revenue of $34.45 billion, a year-on-year increase of 21% and a record high; GAAP earnings per share were $12.62 and non-GAAP earnings per share were $12.89 (a 37% year-on-year increase), both reaching record levels; operating cash flow was $8.87 billion, and the company returned $4.75 billion to shareholders throughout the year ($3.18 billion in buybacks and $1.57 billion in dividends).

In terms of guidance, the company expects Q1 fiscal 2027 revenue to be about $11.1 billion (plus or minus $500 million), higher than analysts' average estimate of about $10.89 billion; adjusted earnings per share are expected to be about $4.35 (plus or minus $0.20), also exceeding expectations. The company believes that strong demand for advanced AI chips will continue to drive investment in semiconductor manufacturing equipment, and its after-hours share price once rose by about 3%.

CEO Gary Dickerson stated in a release that fiscal 2026 delivered record performance, and the Semiconductor Systems business is expected to achieve over 40% growth throughout the 2026 calendar year. "AI continues to drive incremental demand for semiconductors."

At the end of October, Dickerson had clearly stated the plan to double the company's revenue over the coming years but not to increase staff in proportion, instead mainly relying on AI tools to improve R&D and quality control efficiency, and launching a $5 billion EPIC R&D Center in Silicon Valley to accelerate next-generation chip development. However, the expansion of U.S. export controls against China had once led the company to expect a loss of about $600 million in revenue for fiscal 2026, as the Chinese market remains its biggest policy variable.