Applied Materials posted record revenue, up 53%, topping expectations on AI chip demand

Applied Materials has forecasted fiscal first-quarter revenue to exceed Wall Street's predictions, driven by robust demand for advanced AI chips, according to the company's CEO Gary Dickerson. The Santa Clara, California-based firm, which provides semiconductor manufacturing equipment, benefits from increased spending by chipmakers rushing to meet the growing AI-led demand for chips and memory.

Shares of the company saw a slight increase in extended trading, with its stock surging approximately 48% this year. Analyst Bob O’Donnell from TECHnalysis Research commented on the strong demand, stating that chipmakers and foundries are purchasing as much equipment as they can. Applied's Semiconductor Systems revenue rose to $8 billion in the fourth quarter, marking a 64% increase from the previous year.

The company, a partner for Apple's American Manufacturing Program at its Austin, Texas facility, anticipates a record year in 2027, with wafer fab equipment demand expected to rise by more than 30%. China contributed 25% of the fourth-quarter revenue, but it declined slightly to 25% from 29% a year earlier, while sales in China rose by about 35% to $2.64 billion.

Applied Materials expects quarterly revenue to be around $11.10 billion, with a potential range of plus or minus $500 million, surpassing analysts' average estimate of $10.89 billion. The company reported a fourth-quarter adjusted profit of $4.16 per share, outperforming the average analyst estimate of $4.05.