Applied Materials (AMAT) is facing a major reality check after a brutal month on Wall Street wiped out a substantial chunk of its impressive 2026 gains. The semiconductor equipment maker has seen its shares tumble nearly 37% over the past month as investors retreat from high-flying artificial intelligence (AI) and semiconductor stocks, opting to lock in profits after years of strong returns.
Investors are increasingly questioning whether the massive sums being poured into AI infrastructure will translate into sustainable returns anytime soon. Meanwhile, supply chain warnings have further clouded the outlook, and a sweeping Democratic victory in the U.S. midterm elections has reignited concerns about tighter AI regulation, potential industry crackdowns, and tougher export restrictions on semiconductor technology.
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Now, with investor confidence shaken and AMAT stock under significant pressure, all eyes are on Applied Materials' upcoming earnings report. The company is set to release its fiscal 2026 fourth-quarter results after the market closes on Thursday, Nov. 12. The report could prove pivotal in determining whether the recent sell-off reflects a temporary bout of market jitters or deeper concerns about the company's growth prospects. Ahead of the results, here's what investors should know about Applied Materials stock.
About Applied Materials Stock
Founded in 1967, Applied Materials is a Santa Clara, California-based semiconductor equipment and materials engineering company that plays a critical role in the global chipmaking industry. While it does not manufacture finished semiconductors itself, the company develops the sophisticated machinery, technologies, software, and services that chipmakers rely on to produce advanced chips.
Its solutions are used in manufacturing everything from processors and memory chips to the semiconductors powering smartphones, data centers, automobiles, and artificial intelligence applications. As semiconductor designs become increasingly complex and demand for high-performance computing grows, Applied Materials' equipment has become an important part of the industry's efforts to develop smaller, faster, and more energy-efficient chips.
With a market capitalization of approximately $253.36 billion, Applied Materials is enduring a sharp reversal in fortunes on Wall Street as investor enthusiasm for AI-related stocks begins to cool. The selloff has been particularly brutal, with AMAT shares plunging 39% over the past month alone and losing another 14% in just the last five trading sessions. The downturn has also pushed the stock nearly 55% below its 52-week high of $739.67, reached in June.
However, the bigger picture tells a somewhat different story. Despite the recent battering, AMAT stock remains up 30% so far in 2026, comfortably outperforming the broader S&P 500 Index ($SPX), which has advanced just 8% over the same period. This contrast highlights how quickly sentiment has shifted around one of the market's prominent AI infrastructure plays, even as its year-to-date (YTD) gains remain well ahead of the broader market.
www.barchart.com Inside Applied Materials’ Q3 Earnings Report
Applied Materials delivered a stronger-than-expected performance in fiscal third-quarter 2026 on Aug. 13, beating Wall Street estimates on both revenue and earnings as accelerating AI adoption worldwide fueled demand for advanced semiconductor manufacturing equipment. The company posted record revenue of $9.12 billion, up an impressive 25% from $7.30 billion in the year-ago quarter and comfortably ahead of analysts' expectations of $9 billion.
The bottom line was equally impressive, with profitability outpacing revenue growth. Non-GAAP earnings surged 41% year-over-year (YoY) to $3.50 per share, surpassing the consensus estimate of $3.39. Margins also strengthened, reflecting a richer mix of high-value products and improved operational efficiencies. Non-GAAP gross margin expanded 1.5 percentage points to 50.4%, while operating margin climbed 3.3 percentage points to 34%.
Across its business segments, Semiconductor Systems remained the primary growth engine, generating $7.04 billion in revenue, a 27% increase from the same period last year. Applied Global Services (AGS) also delivered steady growth, contributing $1.78 billion to the quarterly topline. Cash generation provided another bright spot. Applied Materials reported a record $3.04 billion in cash from operations during the quarter and returned $860 million to shareholders.
This included $440 million in share repurchases and $420 million in dividend payments. The company also extended its streak of YoY gross margin expansion to 13 consecutive quarters, underscoring the sustained improvement in its profitability. Management highlighted expectations for continued strong revenue growth in the second half of the calendar year, particularly across DRAM, leading-edge foundry-logic, and advanced packaging.
Looking further ahead, Applied Materials is also investing in additional manufacturing capacity to prepare for anticipated demand through the end of the decade. In terms of guidance, management expects fiscal fourth quarter 2026 revenue to range between $9.75 billion and $10.75 billion, while non-GAAP earnings per share are projected to come in between $3.82 and $4.22.
How Do Analysts View AMAT Stock?
Despite the recent selloff, Wall Street remains firmly bullish on Applied Materials heading into its fourth-quarter earnings report. AMAT stock carries a consensus “Strong Buy” rating, reflecting continued analyst confidence in its long-term growth prospects. Of the 37 analysts covering the company, 26 recommend a “Strong Buy,” three have a “Moderate Buy” rating, and the remaining eight maintain a “Hold” rating.
The optimism is also reflected in analysts' price targets. The average target of $634.94 points to a potential upside of approximately 91% from current levels, while the Street-high target of $900 suggests a staggering 170% upside.
www.barchart.com On the date of publication, Anushka Mukherji did not directly have a position in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. For more information please view the Barchart Disclosure Policy here.
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