--- title: "Windfall Ahead, AMAT Gets Cold Feet?" type: "Topics" locale: "en" url: "https://longbridge.com/en/topics/43393083.md" description: "Applied Materials (AMAT) reported its FY26 Q3 results post-market on Aug 14, 2026 Beijing time, covering the quarter ended Jul 2026. Key takeaways follow: 1) Core metrics:Revenue was $9.12bn (+25% YoY), slightly above the Street’s $9.02bn. Growth was fueled by the build-out of AI compute infrastructure, which boosted demand for advanced logic, DRAM, and advanced packaging equipment.GPM was 50.3%. It improved by 40bps QoQ..." datetime: "2026-08-14T03:20:02.000Z" locales: - [en](https://longbridge.com/en/topics/43393083.md) - [zh-CN](https://longbridge.com/zh-CN/topics/43393083.md) - [zh-HK](https://longbridge.com/zh-HK/topics/43393083.md) author: "[Dolphin Research](https://longbridge.com/en/dolphin.md)" --- # Windfall Ahead, AMAT Gets Cold Feet? Applied Materials (AMAT) released its FY26 Q3 results (to Jul 2026) after the U.S. close on Aug 14 Beijing time. Key takeaways: **1) Core metrics**: **Revenue came in at $9.12bn (+25% YoY)**, slightly above the Street at $9.02bn. Growth was driven by AI compute infrastructure buildouts, which boosted demand for advanced logic, DRAM and advanced packaging tools. **GPM was 50.3%, up 40bps QoQ, in line with expectations (50.1%)**. With downstream capex expanding, margins trended higher. The modest uplift reflected added cost investment in semi equipment and services. **2) Segment details**: $Applied Materials(AMAT.US) operates across semi equipment and services, with equipment contributing over 70% of revenue. **Within semi equipment: (i) Logic revenue was $4.72bn, up 18% QoQ**, led by advanced node demand. **(ii) DRAM revenue was $1.83bn, up 6% QoQ**, dampened by a mismatch between customer ramp schedules and delivery cycles due to cleanroom constraints. **3) OpEx**: **Operating expenses rose to about $1.51bn, up 14% YoY**. R&D was up to $1.10bn, while G&A and S&M were stable. The company announced a 4% headcount reduction in late Oct 2025. As results improved, it aggressively rehired semi engineers and service staff, with headcount up another 7% QoQ this quarter. **4) Guidance**: **AMAT guides FY26 Q4 revenue of $9.75–10.75bn, ahead of the Street ($9.6bn)**, implying a midpoint QoQ increase of 12.5%. The company expects Non-GAAP EPS of $3.82–4.22, also above the Street ($3.71). **Dolphin Research view: Solid print, conservative tone** **AMAT delivered on revenue and margins**, with growth fueled by AI infrastructure, lifting demand for advanced logic, DRAM, and advanced packaging equipment. Next-quarter guidance topped expectations. **However, shares sold off sharply after-hours, mainly on management commentary: prior guidance for 'semi equipment growth of 30%+ in CY2026' was not explicitly raised this time**. **Management noted demand stayed strong this quarter, with growth set to exceed last quarter's '30%+'**. They also highlighted expected share gains within the year, yet stopped short of quantifying, even to '40%', suggesting limited confidence in near-term order certainty. **Given core OEM capex plans (up 40%+ for the year), AMAT's guidance looks soft**. Several majors have recently raised full-year capex again, and the market was looking for a sizable lift from the company. **Also, AMAT's fiscal year is offset from the calendar year by two months**. Even assuming 40% growth for CY2026, this implies a sharp deceleration in sequential growth for semi equipment (this quarter 18% -\> next quarter 12% -\> the quarter after 6%). Notably, Q1 FY27 (to Jan 2027) is a 14-week quarter, so that '+6%' translates to roughly flat on a 13-week basis, which is unlikely to please the market. Beyond the quarter, investors focused on several areas: **a) Foundry/logic capex**: With AI demand, **multiple key foundries raised capex outlooks again, a primary driver for semi equipment and shares**. Specifically: **(i) TSMC lifted its 2026 capex guide to $60–64bn**, with an annual increase of about $20bn. **(ii) Micron raised 2026 capex again to $27bn; (iii) Samsung and SK Hynix also flagged higher capex**. Aggregating these, **global core foundry capex growth in 2026 points to roughly 40%**, with most of the delta from TSMC's advanced nodes and memory makers' expansions. Yet AMAT did not explicitly raise its '30%+ full-year' semi equipment growth view post-print, which disappointed the market. **b) Memory demand and order visibility:** **Capex plans suggest stronger appetite from memory makers**. Given DRAM and HBM rely more on deposition, CMP and advanced packaging, AMAT should benefit from this memory-led capex upcycle. **AMAT's revenue mix skews to logic, with memory at only 20–30%**, so the lift is less pronounced than for Lam Research (with memory near half of revenue). Notably, AMAT has the broadest coverage across DRAM/HBM steps (deposition/CMP/metrology/packaging), supporting steadier execution. **Management reiterated on the call** 'largest customer provides an 8-quarter rolling forecast', with an incremental datapoint that 'some customer discussions extend to 2030'. The latter remains at the discussion stage, while the 8-quarter window carries higher certainty. AMAT's current market cap is $424.4bn, implying about 31x PE on FY27 post-tax core operating profit (assuming a 30% 2-year revenue CAGR, 51% GPM, 13% tax rate). **Historically, the company's PE range has mostly been 18–30x, placing the current multiple above the midpoint**. **AMAT, ASML and Lam Research sit in the upstream equipment layer**, and tend to trade as a basket driven by semi cycles and foundry capex. AMAT's current multiple is broadly in line with ASML (31x) and Lam Research (35x). **For semi equipment, the focus is on the certainty of capacity additions and high growth over the next 2–3 years**. As long as AI capex and the semi cycle remain strong, further capex raises should support upstream equipment earnings and multiples. **Demand had been concentrated in advanced nodes and memory**. SMIC's margin print yesterday suggests mature nodes are also entering an up-cycle, with broad-based price hikes in 8-inch lines. From AI-driven tightness, supply-demand pressures are spilling into more semi segments, and increased investment in traditional nodes could further lift equipment demand. **Overall, with rising AI capex and a thaw in traditional semis, the broader semi uptrend remains intact**. Majors are likely to keep lifting capex, underpinning faster growth for the company and the equipment industry. **The lack of an explicit raise to the full-year semi equipment outlook (still '30%+') may dent sentiment near term**. If the semi up-cycle holds, any pullback should be limited, and downstream expansion and spend increases should continue to support earnings and valuation upside. Below are Dolphin Research's detailed datapoints on AMAT: **Dolphin Research on AMAT: archive** May 15, 2026 call recap '[AMAT (Trans): Semi equipment up 30%+ for the year, GPM trending up](https://longportapp.cn/en/topics/40810156)' May 15, 2026 earnings take '[Capex boom underway: can AMAT capture the surge?](https://longportapp.cn/en/topics/40807533)' Feb 13, 2026 call recap '[AMAT (Trans): Semi equipment to grow 20%+; strength into 2027](https://longportapp.cn/en/topics/38715670)' Feb 13, 2026 earnings take '[AMAT: Capex supercycle arrives; springtime for equipment stocks](https://longportapp.cn/en/topics/38714314)' Dec 10, 2025 deep dive '[Memory on fire: will AI capex finally revive AMAT?](https://longportapp.cn/en/topics/37032267)' Nov 10, 2025 call recap '[AMAT (Trans): steady 1H next year; growth back-end loaded](https://longportapp.cn/en/topics/36367347)' Nov 10, 2025 earnings take '[Memory running hot: can AMAT ride the wave?](https://longportapp.cn/en/topics/36366826)' Sep 18, 2025 deep dive '[AMAT: AI names rallying; when does AI capex go broad-based?](https://longportapp.cn/en/topics/34198484)' Risk disclosure and statement: [Dolphin Research disclaimer and general disclosure](https://support.longbridge.global/topics/misc/dolphin-disclaimer) ### Related Stocks - [AMAT.US](https://longbridge.com/en/quote/AMAT.US.md) - [TSM.US](https://longbridge.com/en/quote/TSM.US.md) - [MU.US](https://longbridge.com/en/quote/MU.US.md) - [SSNGY.US](https://longbridge.com/en/quote/SSNGY.US.md) - [LRCX.US](https://longbridge.com/en/quote/LRCX.US.md) - [SKHY.US](https://longbridge.com/en/quote/SKHY.US.md) - [SKHYV.US](https://longbridge.com/en/quote/SKHYV.US.md) - [TSMX.US](https://longbridge.com/en/quote/TSMX.US.md) - [TSMY.US](https://longbridge.com/en/quote/TSMY.US.md) - [TSMZ.US](https://longbridge.com/en/quote/TSMZ.US.md) - [TSMG.US](https://longbridge.com/en/quote/TSMG.US.md) - [TSMU.US](https://longbridge.com/en/quote/TSMU.US.md) - [STSM.US](https://longbridge.com/en/quote/STSM.US.md) - [MUU.US](https://longbridge.com/en/quote/MUU.US.md) - [MUD.US](https://longbridge.com/en/quote/MUD.US.md) - [MULL.US](https://longbridge.com/en/quote/MULL.US.md) - [MUZ.US](https://longbridge.com/en/quote/MUZ.US.md) - [AMA.US](https://longbridge.com/en/quote/AMA.US.md) - [LRCU.US](https://longbridge.com/en/quote/LRCU.US.md) - [SK.US](https://longbridge.com/en/quote/SK.US.md) - [SKHZ.US](https://longbridge.com/en/quote/SKHZ.US.md) - [SKUU.US](https://longbridge.com/en/quote/SKUU.US.md) - [HYNX.US](https://longbridge.com/en/quote/HYNX.US.md) - [SKDD.US](https://longbridge.com/en/quote/SKDD.US.md) - [SKHL.US](https://longbridge.com/en/quote/SKHL.US.md) - [SKHU.US](https://longbridge.com/en/quote/SKHU.US.md) - [07709.HK](https://longbridge.com/en/quote/07709.HK.md)