TLDR
- Applied Materials reported Q2 adjusted EPS of $2.86, beating the $2.68 estimate, up from $2.39 a year ago.
- Revenue hit $7.9 billion, above the $7.7 billion forecast, up 11% year-over-year.
- Q3 guidance came in at adjusted EPS of $3.36 — up 35% year-over-year and well ahead of expectations.
- Q3 revenue guidance of ~$8.95 billion topped the $8.09 billion analyst estimate.
- Despite the strong beat-and-raise, AMAT stock fell in Friday premarket trading.
Applied Materials (AMAT) posted a strong second quarter and issued guidance that surprised Wall Street to the upside — yet the stock slipped in Friday premarket trading.
$AMAT Q2'26 EARNINGS HIGHLIGHTS
🔹 Revenue: $7.91B (Est $7.68B) 🟢; +11% YoY
🔹 Adj. EPS: $2.86 (Est $2.68) 🟢; +20% YoY
🔹 Non-GAAP Gross Margin: 50.0%
🔹 Non-GAAP Operating Margin: 32.1%
🔹 Semiconductor Systems Revenue: $5.97BQ3 FY26 Guide:
🔹 Revenue: $8.45B-$9.45B (Est… pic.twitter.com/hOEJzaZvee— Wall St Engine (@wallstengine) May 14, 2026
Adjusted EPS came in at $2.86, ahead of the $2.68 consensus and up from $2.39 in the same quarter last year. Revenue reached $7.9 billion, beating the $7.7 billion estimate and up 11% year-over-year.
The real headline, though, was the Q3 outlook. Applied guided for adjusted EPS of $3.36 — a 35% jump year-over-year — and revenue of roughly $8.95 billion. Both figures cleared analyst estimates by a wide margin. The Street had been penciling in that kind of surge for Q4, so seeing it arrive a quarter early caught some off guard.
CEO Gary Dickerson said the company sees “an exceptionally strong foundation for sustained multi-year revenue and profit growth,” pointing to rising demand and greater long-term visibility from customers.
AI Infrastructure Driving Equipment Demand
The company makes machines used across a wide range of semiconductor manufacturing steps. AI chips require especially complex and precise manufacturing processes, and Applied’s tools are involved in key stages of turning silicon wafers into finished chips.
Its customer base includes TSMC and Micron — two of the biggest names in chip production. As AI infrastructure spending has ramped up from large tech firms and enterprises, chipmakers have moved aggressively to expand capacity, lifting orders for Applied’s equipment.
Applied now expects over 30% growth in its semiconductor equipment business for 2026, along with a more than 50% rise in packaging revenues. William Kerwin, senior equity analyst at Morningstar, called the results a “strengthening of the ongoing AI upcycle for wafer fabrication equipment investments.”
The stock is up 71% in 2026 heading into this report.
A Strong Setup, With Some Caution
Chip manufacturers spent much of the post-pandemic period pulling back on capital spending after a sharp boom-bust cycle. That caution has largely given way to urgency. Manufacturers are now racing to bring top-end capacity online, with buildouts expected to continue through 2028.
Applied’s Q3 guidance suggests that acceleration is arriving sooner than analysts had modeled.
Despite the strong numbers across the board, AMAT fell in premarket on Friday. The stock had already gained sharply this year, so even a beat-and-raise isn’t always enough when expectations are already elevated.
Applied Materials extended trading saw the stock rise about 3% immediately following the Thursday earnings release before giving back those gains ahead of the Friday open.
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