Applied Materials, Inc.

Q2 FY26Semiconductors and Semiconductor Equipment

Applied Materials, Inc. Q2 FY26 Results — Earnings Call Analysis

Q2 FY26 earnings call: what management guided on revenue, margins and order book.

Price₹450

Market cap₹3.6L Cr

P/E42.8

Updated29 May 2026

Read4 min read

What the Q2 FY26 call signalled

4 of 4 strong

RevenueRank 2

MarginRank 2

CapexYes

Order bookYes

Not discussed on this call: fundraise.

The short version

- Strong growth expected in second half of the year in leading-edge logic, DRAM, advanced packaging, and NAND driven by AI demand (Page 13). - Applied Materials expects strong revenue and earnings growth driven by AI demand, leading-edge foundry logic, DRAM, and advanced packaging.

From Applied Materials, Inc.'s Q2 FY26 earnings-call transcript · updated 29 May 2026.

Revenue & Sales Performance

Rank 2

Strong growth expected in second half of the year in leading-edge logic, DRAM, advanced packaging, and NAND driven by AI demand (Page 13).
Growth in 2026 and 2027 anticipated to be similar, with AI computing driving fastest-growing markets (Page 13).
Secular growth outlook through at least 2028, driven by AI and additional capacity plans from customers (Page 11).
Systems business projected to grow over 30% year-over-year in 2026, with linear growth expected from Q3 to Q4 (Page 8).
AGS (Applied Global Services) growth raised to mid-teens percentage range, with 2026 higher due to improved fab utilization and new factory ramps (Pages 7, 12).
ICAPS business to remain flat to slightly higher in calendar 2026, recovering from recent capacity digestion (Pages 12, 13).
Expansion supported by over 100 factory projects globally and increasing floor space and clean room capacity (Page 8).
Overall long-term optimism tied to sustained AI-driven demand across semiconductor segments (Pages 4, 7, 13).

Profitability & Margins

Applied Materials expects strong revenue and earnings growth driven by AI demand, leading-edge foundry logic, DRAM, and advanced packaging.
Q3 revenue guidance: approximately $8.95 billion, up ~23% YoY; non-GAAP EPS guidance: $3.36 (+36% YoY).
Semiconductor Systems revenue expected around $6.9 billion; AGS revenue about $1.75 billion.
Non-GAAP gross margin expected to modestly increase to ~50.1%.
Operating margin improved 140 bps YoY to 32.1%; AGS operating margins also increased.
Services business (AGS) growth outlook raised to mid-teens percentage growth over the medium term, with higher growth expected this year due to fab utilization gains.
Margins expected to improve gradually driven by portfolio enrichment and new product launches.
Strong focus on cost efficiency and operating leverage while investing in R&D.
Long-term secular growth anticipated through 2027 and beyond, supported by customer capacity expansion & AI-driven compute demand.

See what Applied Materials, Inc. said on profitability & margins — free account, 30 seconds.

Capital Expenditure Plans

Yes

Applied Materials is investing in expansions in the U.S., Europe, and a new manufacturing center in Singapore to support increased production capacity.
Increased build plans, inventory positions, and logistics capacity are underway to enhance supply chain robustness.
The company is focusing on funding collaborative R&D to address high-value technology challenges and bring new tools to market.
Investment in AI technologies is being leveraged to accelerate innovation, revenue, and operating leverage.
Capacity additions are supported by over 100 tracked factory projects globally, with more than 10 added in the last quarter, highlighting ongoing greenfield fab expansions.
There is significant available manufacturing floor space ready to be utilized, with plans to hire and ramp up output accordingly.
Strategic acquisitions, such as NEXX for large-area packaging, bolster the advanced packaging portfolio.
Investment in building a training center and adding customer engineers supports ramping its Advanced Global Services (AGS) business.

Fundraising & Capital Structure

There is no mention of any current or planned new fundraising through debt or equity in the provided transcript.
The company discussed significant cash from operations ($845 million) and capital expenditures ($635 million) resulting in free cash flow ($210 million).
They also highlighted returning capital to shareholders via $365 million in dividends and $400 million in stock repurchases.
There was no indication of plans to raise additional capital through issuing new debt or equity in the near term.

See what Applied Materials, Inc. said on fundraising & capital structure — free account, 30 seconds.

Order Book & Pipeline

Yes

Applied Materials is experiencing strong demand, with customers increasing orders significantly in the last 90 days.
The company emphasizes 8-quarter rolling visibility with large customers to aid supply chain planning and ensure supplier capacity expansions.
They are tracking over 100 factory projects globally, recently adding more than 10 in one quarter, signaling a robust future demand pipeline.
Systems business booked out for at least a year, supporting expectations of continued strong growth (30%+ year-over-year).
Capacity is ready to be expanded with available floor space and staff ramp-up planned as demand continues.
Supply chain improvements have been made but remain a focus to meet growing order volumes timely.
Overall, the order book supports substantial growth in both the current year and the coming years, driven primarily by AI-driven semiconductor demand.

Others in Semiconductors and Semiconductor Equipment this season

FormFactor, Inc. (Q2 FY26)
FormFactor, Inc. Q2 FY26 quarterly results analysis. FormFactor expects continued strong revenue growth, with Q2 2026 guidance at $240 million ± $5 million, up
Skyworks Solutions, Inc. (Q2 FY26)
Skyworks Solutions, Inc. Q2 FY26 quarterly results analysis. Revenue opportunity expected to rise year-over-year, acting as a growth tailwind through 2030 (Page
Onto Innovation Inc. (Q2 FY26)
Onto Innovation Inc. Q2 FY26 quarterly results analysis. Advanced packaging revenue expected to grow more than 50% in 2026, driven by Dragonfly G5 and panel-lev
Nova Ltd. (Q2 FY26)
Nova Ltd. Q2 FY26 quarterly results analysis. Nova expects robust growth driven by advanced DRAM, Logic (including gate-all-around), and advanced packaging mark

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Frequently Asked Questions

What were Applied Materials, Inc. Q2 FY26 results?

What is Applied Materials, Inc. share price analysis?

Applied Materials, Inc. currently shows a moderate growth signal based on ranking data. The stock trades at a P/E of 42.8 with a market cap of $357,028. Investors should review the full earnings analysis for detailed insights.

Is Applied Materials, Inc. planning capital expenditure?

- Applied Materials is investing in expansions in the U.S., Europe, and a new manufacturing center in Singapore to support increased production capacity.

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This analysis is AI-generated based on publicly available earnings data and concall transcripts. This is not investment advice. Please consult a SEBI-registered advisor before making investment decisions.