Applied Materials Inc.

AMAT
Financial Analysis · Updated May 12, 2026 · Coverage 2026-Q2
Latest Q Revenue
$7.9B
Q2 FY2026 · +11.4% YoY · Beat consensus by 3.4%
TTM ROIC
29.3%
FY2025 · NOPAT / Invested Capital (Equity + Debt - Excess Cash); NOPAT = GAAP Operating Income × (1 - 0.24) · WACC ~9% · Moat spread +20pp
Margin Profile
Gross 48.7%
Operating 29.2%
FCF 20.1%
FY2025
Net Cash
$4.0B
Cash $10.0B · Debt $6.0B · FY2025
Diluted Shares
794M
FY2025

Business Overview


ticker: AMAT step: 01 generated: 2026-05-12 source: quick-research

Applied Materials, Inc. (AMAT) — Business Overview

Business Description

Applied Materials is the world's largest provider of semiconductor manufacturing equipment, with industry leadership across deposition, etching, inspection, and advanced packaging. The company is uniquely positioned for the AI semiconductor supercycle as the dominant supplier of equipment for Gate-All-Around (GAA) transistors at 2nm/below and HBM advanced packaging — the two most critical manufacturing inflections in AI chip production. CEO Gary Dickerson (since 2013). FY25 set record revenue + EPS despite China export controls.

Revenue Model

  • Semiconductor Systems (~75% of revenue): Deposition, etch, ion implant, CMP, RTP, metrology systems for foundry + memory + logic customers
  • Applied Global Services (AGS, ~22%): Service contracts, spare parts, refurbishment, 200mm equipment for trailing-edge — recurring high-margin
  • Display + Adjacent Markets (~3%): Display manufacturing equipment, solar PV

Products & Services

Leading-Edge Logic + Memory Equipment
  • Sym3 Z Magnum etch system: Critical for GAA transistors at 2nm
  • Viva radical treatment: Surface treatment for GAA
  • CVD/PVD deposition: Thin film + advanced metal layers
  • Selective process equipment: Selective etch + deposition
  • Olympia ALD: Atomic layer deposition for advanced nodes
  • Reflexion CMP: Chemical mechanical planarization
  • Sculpta patterning: Pattern-shaping co-optimization
HBM + Advanced Packaging
  • Hybrid bonding equipment (Hybrid Bonding Cluster)
  • Through-silicon via (TSV) equipment
  • 3D stacking + advanced packaging tools
  • DRAM revenue ~50% growth in FY2025 (HBM-driven)
Trailing-Edge (Mature Process Nodes)
  • 200mm + lagging-edge 300mm tool sales — significant China demand
  • Refurbished tools through AGS
Applied Global Services
  • Service contracts on $400B+ installed base
  • Parts, training, performance optimization

Customer Base & Go-to-Market

  • Foundries: TSMC, Samsung Foundry, Intel Foundry, GlobalFoundries, SMIC, UMC
  • Memory: Micron, SK Hynix, Samsung Memory, Kioxia, Solidigm
  • IDMs: Intel, Texas Instruments, Infineon, ST Micro
  • Geographic mix: ~30% China (declining), ~30% Korea, ~20% Taiwan, ~10% Japan, ~10% rest
  • Customer concentration: Top 3 (TSMC, Samsung, Intel) are 50%+ of revenue

Competitive Position

AMAT is the global #1 wafer fab equipment (WFE) supplier (~22% market share) ahead of ASML (~21%, monopoly in EUV lithography), Lam Research (~14%, etch leader), Tokyo Electron (~14%), KLA (~6%, inspection leader). Moats: (1) breadth across deposition + etch + implant + CMP + inspection — only multi-product player at scale, (2) leadership in GAA + HBM equipment (the two critical AI inflections), (3) AGS recurring revenue cushions cyclicality, (4) $15B backlog provides visibility. Faces (1) China export controls reducing TAM, (2) ASML EUV monopoly capturing more value at leading edge, (3) Chinese domestic equipment competition (AMEC, NAURA).

Key Facts

  • Founded: 1967 (James C. Morgan, Santa Clara CA)
  • Headquarters: Santa Clara, CA
  • Employees: ~36,000
  • Exchange: NASDAQ
  • Sector / Industry: Technology / Semiconductor Equipment
  • Market Cap: ~$280B (May 2026)
  • CEO: Gary Dickerson (since 2013)
  • Dividend: $1.84 annual ($0.46 quarterly)
  • 8+ consecutive years of dividend growth
  • FY end: late October
  • FY25 record revenue $28.4B

Financial Snapshot


ticker: AMAT step: 04 generated: 2026-05-12 source: quick-research

Applied Materials, Inc. (AMAT) — Financial Snapshot

Note: AMAT fiscal year ends late October. "FY2025" = fiscal year ended Oct 26, 2025.

Income Statement Summary

Metric FY2024 FY2025 FY2026E YoY
Revenue $27.2B $28.4B ~$33B+ +16%+
Semiconductor Systems Revenue growing growing +20%+ mgmt guide
Non-GAAP Gross Margin 47.5% 48.8% (record) maintain +130bps
Non-GAAP Operating Margin 30% 30%+ 32%+
Non-GAAP EPS $8.65 $9.42 ~$11 (+17%)

Quarterly Trajectory (Recent)

Quarter Revenue
Q3 FY25 (Aug 2025) $7.05B
Q4 FY25 (Oct 2025) $6.83B
Q1 FY26 (Jan 2026) record (beat + raise)

Geographic Revenue Mix

Region FY2024 FY2025
China $10.1B (37%) $8.5B (30%)
Taiwan rising rising
Korea rising rising (Samsung, SK Hynix HBM)
Japan, US, Europe balance balance

DRAM + HBM Performance

Metric Value
Q3 FY25 DRAM Revenue Growth ~+50% YoY
DRAM etch sales $1B+
FY25 record DRAM revenue driven by HBM + 3D advanced packaging

Backlog

Metric Value
Total Backlog (Oct 2025) $15.0B
% of backlog >12 months out 31%

2026 Outlook

Item Guidance
Semiconductor Systems growth +20%+ in FY26
2H FY26 weighting Demand-heavy in 2H
China export hit FY26 -$600M
AI data center capex 2026 $600B+ (driver)
AI data center capex 2027 $700B+

Cash Flow & Balance Sheet (FY2025)

Metric Value
Operating Cash Flow ~$9B
Capital Expenditures ~$1.2B
Free Cash Flow ~$7.8B
Cash & Investments ~$10B
Total Debt ~$6B
Net Cash Position ~$4B

Key Ratios (approximate, May 2026)

  • P/E (forward FY26): ~25x | EV/Sales: ~8x | FCF Yield: ~3%
  • Net Cash Position
  • ROIC: ~30%

Growth Profile

FY25 record revenue $28.4B (+4.4%) + record GM 48.8% despite -$1.6B China decline. AI cycle ramping: FY26 SC systems +20%+. AMAT FY26 EPS consensus ~$11 (+17%) → FY27 ~$14 (+27%). Stock up 25% YTD 2026, up 170% trailing year. Bull cycle in semiconductor capex.

Forward Estimates

  • FY2026E Revenue: ~$32-34B (+13-20%)
  • FY2026E Non-GAAP EPS: ~$11 (+17%)
  • FY2027E Revenue: ~$36-38B (+12-19%)
  • FY2027E EPS: ~$13-14 (+18-27%)
  • AI capex tailwind: $600B FY26 → $700B FY27 driving demand

Capital Return

  • Dividend $1.84 annual = ~$1.5B paid
  • 8+ consecutive years of dividend growth
  • Buybacks: $4-5B annual run rate
  • Total return: ~3% combined yield + EPS growth

Deeper Financial Analysis

The fundamental tier adds 9 additional research dimensions for $AMAT.

Revenue Breakdown
Segment revenue, geographic mix, product-line contribution margins, and cohort dynamics.
Financial Trends
Quarter-over-quarter momentum, leading indicators, and inflection point analysis.
Balance Sheet
Debt structure, liquidity runway, dilution risk, and working capital dynamics.
Capital Allocation
Buyback cadence, M&A appetite, dividend policy, and reinvestment priorities.
Returns on Capital (ROIC)
Multi-year ROIC vs. WACC, marginal returns on reinvestment, sales-to-invested-capital efficiency, and moat spread.
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