Applied Materials lifts 2026 outlook 30%

Applied Materials raised its calendar 2026 growth outlook on May 14 after reporting record quarterly results and pointing to heavier spending on AI chip infrastructure. The company said its semiconductor equipment business should grow more than 30% this year, up from a prior view of more than 20% discussed earlier in 2026. Revenue for the fiscal second quarter ended April 26 reached $7.91 billion, up 11% from a year earlier, while non-GAAP earnings per share rose 20% to $2.86. Chief Executive Gary Dickerson said the “rapid global build-out of AI computing infrastructure” and Applied’s position in leading-edge logic, DRAM and advanced packaging supported the higher forecast. ### Where did the higher 2026 forecast come from? Gary Dickerson said on May 14 that Applied now expects its semiconductor equipment business to grow “more than 30 percent” in calendar 2026. In the same earnings release, he tied that change to demand tied to AI systems and to the company’s positions in logic, memory and packaging. CFO Brice Hill said “the growth in AI that Applied has been investing for is now in full force.” (ir.appliedmaterials.com) Applied also posted record profitability in the quarter. GAAP gross margin reached 49.9%, non-GAAP gross margin was 50.0%, and cash from operations was $845 million, according to the company’s release. ### Why is advanced packaging showing up so often in Applied’s pitch? (ir.appliedmaterials.com) Applied Materials said on May 3 that it agreed to acquire ASMPT’s NEXX business, which makes large-area advanced packaging deposition equipment. The company said the deal would expand its panel-level packaging portfolio, which it described as useful for building larger chiplet-based AI accelerators with GPUs, high-bandwidth memory and I/O chips in a single package. (ir.appliedmaterials.com) The NEXX announcement gave a more specific picture of where Applied sees demand moving. Applied said more complex 2.5D and 3D chiplet stacks are pushing the industry from 300-millimeter wafers toward panel formats as large as 510 by 515 millimeters or more. Prabu Raja, president of Applied’s Semiconductor Products Group, said the addition would complement Applied’s packaging position in panel processing. The transaction is expected to close within the next several months, subject to customary conditions. (ir.appliedmaterials.com) ### What is the TSMC partnership actually about? Applied Materials said on May 11 that TSMC would partner with it at the EPIC Center in Silicon Valley to work on materials engineering, equipment innovation and process integration for AI scaling. Applied has described the EPIC Center as a collaborative semiconductor R&D site designed to cut the time from research to commercialization by several years. (ir.appliedmaterials.com) The company has been adding named participants around that site. Samsung Electronics was announced in February as a founding member of the $5 billion EPIC Center, and Applied said on May 11 that Arizona State University, Rensselaer Polytechnic Institute and Stanford University would join as inaugural research partners. Applied said those university programs would focus on advanced materials, new process and device technologies, and chip architecture changes tied to next-generation AI chips. (ir.appliedmaterials.com) ### Where do Nvidia and Synopsys fit into this story? Applied Materials said in its May 14 earnings materials that it had joined Synopsys and NVIDIA in a collaboration to advance AI and quantum chemistry research with accelerated materials modeling. Synopsys said in March that Applied was using Synopsys QuantumATK optimized with NVIDIA cuEST to speed complex quantum chemistry simulations for large-scale dynamic materials modeling by up to 30 times. (ir.appliedmaterials.com) Applied has separately described its NVIDIA work as part of an effort to use GPU-accelerated simulation in semiconductor manufacturing and materials development. In a company blog published in March, Applied said the collaboration was aimed at turning atomic-level materials modeling into faster engineering work for energy-efficient AI chips. (ir.appliedmaterials.com) ### What did Applied say about capacity and execution? Brice Hill said on May 14 that Applied had increased its build plan, inventory positions and logistics capacity to support customer demand. The company said those steps were part of its effort to keep pace with customer growth while raising operating profit and productivity. (appliedmaterials.com) Applied also gave a near-term marker for investors to watch. The company forecast fiscal third-quarter 2026 revenue of about $8.95 billion, plus or minus $500 million, with non-GAAP earnings per share of about $3.36, plus or minus $0.20, according to its published earnings materials. (fool.com) (ir.appliedmaterials.com)