Applied Materials Shatters Records on AI-Fueled Semiconductor Boom

SANTA CLARA, Calif. – May 14, 2026 – Applied Materials, a linchpin in the global semiconductor ecosystem, today announced record-breaking financial results for its second quarter, delivering a powerful demonstration of the AI revolution's impact on the foundational technology industry. The company posted a record revenue of $7.91 billion, an 11 percent increase from the previous year, with profits surging even higher.

The results, which surpassed analyst expectations, were propelled by what the company describes as the "rapid global build-out of AI computing infrastructure." This surge in demand for more powerful and efficient chips translated into record GAAP earnings per share of $3.51, a remarkable 33 percent jump year-over-year. The company's non-GAAP EPS also hit a record $2.86, up 20 percent.

“Applied Materials delivered record quarterly performance, and we now expect our semiconductor equipment business to grow more than 30 percent in calendar 2026,” said Gary Dickerson, President and CEO, in a statement. “The rapid global build-out of AI computing infrastructure combined with Applied’s strong leadership positions in leading-edge logic, DRAM and advanced packaging provide an exceptionally strong foundation for sustained, multi-year revenue and profit growth.”

The Engine Room of the AI Revolution

While AI applications capture headlines, Applied Materials' results highlight the critical, behind-the-scenes work of building the engines that power them. The company's machinery is essential for manufacturing the world's most advanced semiconductors, and the current AI boom is creating unprecedented demand. Industry forecasts underscore the magnitude of this shift, with some analysts projecting the market for generative AI chips alone could approach $500 billion in 2026.

To meet this demand, Applied has introduced new chip-making systems specifically designed for the next generation of transistors. The company unveiled its Precision™ Selective Nitride PECVD and Trillium™ ALD systems, which are engineered to create the minuscule, atomic-scale features required for 3D Gate-All-Around (GAA) transistors. These advanced transistors are crucial for building the faster, more power-efficient logic chips that are essential for sustaining the pace of AI development.

“The growth in AI that Applied has been investing for is now in full force,” noted Brice Hill, Senior Vice President and CFO. The company's Semiconductor Systems segment, its largest division, saw revenue climb to $5.97 billion, with a notable 67 percent of that revenue coming from the foundry, logic, and other category—the very sector responsible for producing the world's most advanced AI processors.

A Collaborative Blueprint for Future Chips

Beyond meeting current demand, Applied Materials is aggressively architecting the future of chip manufacturing through a series of strategic collaborations centered around its new EPIC Center in Silicon Valley. This state-of-the-art facility is designed to dramatically shorten the time it takes to bring breakthrough technologies from the lab to high-volume manufacturing, a process that can traditionally take over a decade.

The company announced a sweeping set of new engagements with many of the industry's heaviest hitters. These include:

• A new innovation partnership with TSMC to accelerate the development of semiconductor technologies for the next era of AI.
• A long-term collaboration with SK hynix to advance the development of next-generation DRAM and high-bandwidth memory (HBM), which are critical for AI workloads.
• A joint effort with Micron Technology to develop next-generation memory and storage solutions that increase the energy efficiency of AI systems.

By bringing engineers from these companies to work side-by-side with its own experts, Applied aims to co-innovate on everything from materials engineering to process integration and advanced 3D packaging. The initiative extends beyond industry, with Arizona State University (ASU), Rensselaer Polytechnic Institute (RPI), and Stanford University joining as inaugural academic research partners, creating a powerful synergy between commercial R&D and fundamental science.

Fortifying the Supply Chain and Expanding Capabilities

As the AI arms race intensifies, it is placing immense strain on the global semiconductor supply chain. Advanced packaging, which involves combining multiple chips into a single, more powerful package, has become a significant bottleneck for producing high-end AI accelerators. To address this, Applied announced its agreement to acquire the NEXX business from ASMPT Limited, a leading supplier of deposition equipment for large-area advanced packaging.

This strategic acquisition broadens Applied's portfolio, enabling it to better serve chipmakers building the larger, more complex AI accelerators that are in high demand. The move is part of a broader strategy to ensure operational readiness amid soaring demand. CFO Brice Hill confirmed the company has “increased our build plan, inventory positions and logistics capacity” to support its customers' growth.

This proactive stance is critical in a market where competitors like Lam Research and KLA Corporation are also reporting strong, AI-driven results. The entire sector is benefiting from the tailwind, but is also navigating structural constraints like HBM memory shortages and limited fabrication capacity. Applied's robust financial performance, including a 15 percent dividend increase and $400 million in share repurchases during the quarter, provides the capital to fund these strategic expansions.

The company's outlook for the third quarter remains exceptionally strong, with a revenue forecast of $8.95 billion, plus or minus $500 million, suggesting that the AI-driven momentum is not only sustainable but still accelerating.