Applied Materials Posts Record $10.41B Quarter, Sees WFE Up 30% in 2027

Applied Materials reported record fiscal fourth-quarter revenue of $10.41 billion on November 12, 2026, up 53% from $6.80 billion a year earlier, and CEO Gary Dickerson told investors that demand for advanced semiconductors remains "much higher than supply."

Speaking on the fiscal Q4 earnings call, Dickerson said Applied's current view is that 2027 wafer fab equipment (WFE) demand — industry spending on chipmaking tools — will rise more than 30% year over year. That figure covers the entire industry and is separate from Applied's own guidance. CFO Brice Hill added that shipments to China will probably come in under 25% of the business in 2027.

The stock closed at $380.95 before the release, down 3.58%, valuing the company at $302.3 billion. About an hour after the results, it traded at $381.02, effectively flat.

What did Applied report versus what does it expect?

For the quarter ended October 25, the numbers were records across the board:

• Revenue: $10.41 billion, up 53%, ahead of roughly $10.30 billion expected
• Non-GAAP EPS: $4.16, up 92%, beating the $4.05–$4.06 consensus
• GAAP EPS: $3.40
• Share repurchase: $2.00 billion, the largest quarterly buyback in more than eight years, with $10.8 billion of authorization remaining

The forward figures are management expectations, not booked orders. Dickerson expects Semiconductor Systems revenue to grow more than 40% in calendar 2026 and advanced packaging about 90%. Hill expects cloud capex to rise more than 50% in 2027. Applied did not detail customer orders behind the 2027 view in its release.

In short: the quarter is closed business; the 2027 outlook is a forecast.

Why does a shortage favor toolmakers?

When chip supply trails demand, customers forecast further out and order earlier, which hands equipment suppliers pricing power. Applied's margins show the effect:

• Non-GAAP gross margin: 50.6%, up 250 basis points
• Semiconductor Systems operating margin: 38.8%, up from 29.3%
• Semiconductor Systems revenue: $7.996 billion, against $4.879 billion a year ago

Scarcity, in plain terms, translated directly into margin expansion.

What constraints sit under the 2027 outlook?

Hill said clean room capacity remains a limiting factor for how much equipment the industry can absorb, even as Applied tracks more than 20 fab ramps and line expansions in 2027. Equipment shipments depend on customers finishing the buildings that house the tools.

Hill guided fiscal Q1 revenue to $11.1 billion, give or take $500 million — up 58% at the midpoint — with non-GAAP EPS of $4.35, give or take $0.20. He also flagged that the quarter has 14 weeks, so the extra week flatters the growth rate.

China supplied $2.642 billion of quarterly revenue, second only to Taiwan. Applied paid a $253 million export-control settlement in fiscal 2026, so a smaller China share reduces exposure to new trade rules.

Dickerson tied the outlook directly to AI spending: about 60% of an AI data center's capital cost is silicon, and more than 85% of that silicon is leading-edge foundry logic, DRAM and advanced packaging.

How did peers and investors react?

Lam Research (NASDAQ:LRCX) closed down 0.89% and KLA (NASDAQ:KLAC) down 2.30% alongside Applied. NVIDIA (NASDAQ:NVDA) reports on November 17, and that report may move the group more than these results did.

Applied's stock sits about 48% below its 52-week high of $739.67 and about 19% above its November 5 close of $319.25. Lam carries more China exposure, with China its largest region last quarter at $2.877 billion. KLA guides to a higher 62.5% non-GAAP gross margin, but Applied's DRAM and packaging growth ties it more directly to the shortage Dickerson described.

The markers to watch: if Applied holds above $319.25 through NVIDIA's report, the 2027 outlook remains intact. A close below that level, or fiscal Q1 Semiconductor Systems revenue short of Hill's $8.7 billion guide, would signal the 2027 view is slipping.

The record quarter is confirmed; the 30% WFE call is a bet on AI capex holding.