Applied Materials Q3 Revenue Hits Record $9.12 Billion

Applied Materials, Inc. (NASDAQ: AMAT) reported third-quarter revenue of $9.12 billion, a 25% increase year-over-year, with non-GAAP earnings per share rising 41% to a record $3.50. The company's non-GAAP operating margin expanded to 34.0% from 30.7%, indicating that higher sales translated into stronger profitability during the period.

The Semiconductor Systems division generated $7.04 billion in revenue, with its non-GAAP operating margin increasing to 38.0% from 33.2%. This segment represents approximately three-quarters of the company's total revenue. Applied Global Services contributed $1.78 billion in quarterly revenue, up from $1.46 billion a year earlier, providing a revenue stream alongside new equipment purchases.

Investors have responded to the company's performance, with AMAT stock generating a one-year total return of 79.4%, compared with a 13.72% return for the S&P 500. Yahoo Finance's September 17 valuation snapshot placed the stock at 23.42 times forward earnings, down from 23.92 in October 2025.

Management outlined plans on October 13 to gain more than two percentage points of wafer-fabrication-equipment market share by 2030. The company is targeting non-GAAP gross and operating margins of approximately 54% and 40%, respectively. These figures are management targets rather than achieved results. The latest reported non-GAAP gross margin was 50.4%, which remains below the longer-term 54% target.

The business faces uncertainties related to customer concentration, shifting capacity requirements, and trade restrictions. Applied Materials noted that its results depend on how much semiconductor customers invest and when they place orders. Inventories increased to $6.56 billion at the end of July's quarter from $5.92 billion in October 2025, a buildup that supports anticipated demand but requires accurate forecasting of customer equipment needs.