Applied Materials closed the fourth quarter with better-than-expected results, as the market responded positively to strength in its AI, foundry-logic, and memory segments. Management attributed these results to ongoing customer investment in advanced node transitions and 3D scaling, as well as operational execution in supply chain and cost controls. CEO Gary Dickerson highlighted that “customers continue to accelerate node migrations and new 3D scaling approaches,” expanding opportunities for Applied Materials’ materials engineering portfolio. Investments in research and development and capacity expansion also supported the quarter’s outcomes.
Is now the time to buy AMAT? Find out in our full research report (it’s free for active Edge members).
Applied Materials (AMAT) Q4 CY2025 Highlights:
- Revenue: $7.01 billion vs analyst estimates of $6.89 billion (2.1% year-on-year decline, 1.8% beat)
- Adjusted EPS: $2.38 vs analyst estimates of $2.21 (7.8% beat)
- Adjusted EBITDA: $2.23 billion vs analyst estimates of $2.13 billion (31.9% margin, 4.7% beat)
- Revenue Guidance for Q1 CY2026 is $7.65 billion at the midpoint, above analyst estimates of $7.08 billion
- Adjusted EPS guidance for Q1 CY2026 is $2.64 at the midpoint, above analyst estimates of $2.28
- Operating Margin: 26.1%, down from 30.4% in the same quarter last year
- Inventory Days Outstanding: 153, in line with the previous quarter
- Market Capitalization: $293.1 billion
While we enjoy listening to the management's commentary, our favorite part of earnings calls are the analyst questions. Those are unscripted and can often highlight topics that management teams would rather avoid or topics where the answer is complicated. Here is what has caught our attention.
Our Top 5 Analyst Questions From Applied Materials’s Q4 Earnings Call
- Vivek Arya (Bank of America): Asked about the sustainability of AI-related demand, CEO Gary Dickerson said AI demand is broad-based and supports ongoing WFE strength, with visibility into future quarters.
- Stacy Rasgon (Bernstein): Inquired about gross margin trajectory amid supply constraints, CFO Brice Hill explained that margins should trend favorably as product mix normalizes and cost actions are implemented.
- Timothy Arcuri (UBS): Queried about order cadence in foundry-logic versus memory, CEO Dickerson reported strength in foundry-logic and improving trends in DRAM and HBM investments, with regional momentum in the U.S. and Taiwan.
- Atif Malik (Citi): Sought detail on advanced packaging differentiation, with Dickerson highlighting the company’s comprehensive toolset for wafer-level packaging and hybrid bonding as key differentiators.
- Yu Shi (J.P. Morgan): Asked for updates on capacity expansion and lead times, CFO Brice Hill shared that capacity is being expanded and lead times are improving via supplier qualification and operational streamlining.
Catalysts in Upcoming Quarters
Moving forward, our analysts are watching (1) the pace of AI-driven equipment orders and whether demand for advanced packaging and memory (particularly DRAM and HBM) remains resilient, (2) the company’s execution on capacity expansion and supply chain lead-time improvements, and (3) incremental growth in services and metrology/inspection as process complexity increases. Progress on R&D for new process nodes and compliance with evolving export controls will also be critical signposts.
Applied Materials currently trades at $369.78, up from $328.39 just before the earnings. In the wake of this quarter, is it a buy or sell? Find out in our full research report (it’s free).
Our Favorite Stocks Right Now
If your portfolio success hinges on just 4 stocks, your wealth is built on fragile ground. You have a small window to secure high-quality assets before the market widens and these prices disappear.
Don’t wait for the next volatility shock. Check out our Top 5 Strong Momentum Stocks for this week. This is a curated list of our High Quality stocks that have generated a market-beating return of 244% over the last five years (as of June 30, 2025).
Stocks that have made our list include now familiar names such as Nvidia (+1,326% between June 2020 and June 2025) as well as under-the-radar businesses like the once-small-cap company Exlservice (+354% five-year return). Find your next big winner with StockStory today.
