Applied Materials Forecasts Strong Q3 Revenue as AI Chip Demand Accelerates

Applied Materials posted record fiscal second-quarter revenue on Thursday and issued a stronger-than-expected forecast for the third quarter, fueled by rising global investment in artificial intelligence infrastructure and advanced semiconductor production.

The semiconductor equipment giant expects current-quarter revenue of approximately $8.95 billion, with a margin of plus or minus $500 million. The outlook surpassed Wall Street expectations of $8.09 billion, highlighting continued momentum in the AI-driven chip market. Following the announcement, Applied Materials shares climbed 4.5% in after-hours trading.

The company reported quarterly revenue of $7.91 billion, marking an 11% increase compared to the same period last year and exceeding analysts’ consensus estimate of $7.68 billion. Adjusted earnings also beat expectations, with Applied Materials posting profit of $2.86 per share versus projections of $2.68 per share.

Demand for AI chips continues to strengthen the semiconductor equipment industry as chipmakers expand production capacity for advanced processors used in data centers and AI applications. Manufacturing these next-generation chips requires more sophisticated fabrication technologies, additional silicon wafers, and advanced packaging solutions, all areas where Applied Materials holds a strong market position.

Industry analysts had already anticipated solid results driven by increasing DRAM memory demand and ongoing investments in AI computing infrastructure. The company’s leadership in leading-edge logic chips, DRAM manufacturing, and semiconductor packaging has positioned it to benefit from long-term growth trends in the AI sector.

Gary Dickerson, President and CEO of Applied Materials, said the company delivered record quarterly performance and now expects its semiconductor equipment business to grow more than 30% in calendar year 2026. He added that the rapid global expansion of AI computing infrastructure provides a strong foundation for sustained multi-year revenue and profit growth.

Applied Materials remains one of the key beneficiaries of the AI boom as chip manufacturers continue increasing spending on advanced semiconductor equipment to meet surging global demand.