Applied Materials designs and builds precision machines that chipmakers and display manufacturers use to form, shape and inspect thin layers of material. Its platforms handle steps such as depositing films and removing unwanted material, helping chipmakers create transistors and wiring at atomic scale. Customers include makers of logic chips and memory, as well as manufacturers of advanced displays. The company earns money from equipment sales, replacement parts and services, and factory software that schedules production and monitors manufacturing processes. Applied Materials was founded in 1967 and is headquartered in Santa Clara, California.
Company Size
10,001+
Company Stage
IPO
Headquarters
Santa Clara, California
Founded
1967
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A Motley Fool comparison of chip equipment maker Applied Materials and chipmaker Intel favours Applied Materials as the better 2026 buy, though the author suggests buying shares gradually. Applied Materials' revenue rose 25% to $9.1 billion in the quarter ended July 26, 2026, and net income rose 43% to $2.5 billion. Risks include cyclical demand and China, which made up 28% of revenue. In February 2026 it agreed to pay $252.5 million to settle US export allegations. Intel's second-quarter revenue also rose 25%, to $16.1 billion. It posted an $11.0 billion net loss, driven by a $12.5 billion noncash charge tied to its US government deal. Its foundry unit lost $2.1 billion, and an August share sale raising about $23 billion diluted existing owners. On valuation, Applied trades at 42.2x forward earnings against Intel's 77.7x.
Applied Materials (NASDAQ:AMAT) expects to gain more than two percentage points of wafer-fab-equipment market share by 2030, driven by demand for artificial intelligence (AI) chips. The company outlined its strategy at the SEMICON West technology breakfast. Chief executive officer Gary Dickerson said AI spending is concentrating in leading-edge logic, DRAM memory and advanced packaging, which should make up about 75% of incremental industry growth. For 2030, Applied targets a 54% non-GAAP gross margin, a 40% operating margin and more than $12 billion in services revenue. It expects more than $1 billion in high-bandwidth-memory packaging revenue this year. The company plans to more than double its laboratory and manufacturing capacity, and return 80% to 100% of free cash flow to shareholders.
Applied Materials stock trades at 39.5 times adjusted earnings for the past twelve months, despite sales growth of just 7.8% over the period. The price leans on forecasts that sales will rise 36.3% between fiscal 2026 and fiscal 2027, with profit growing 40.0%. Net margin is expected to widen from 27% in fiscal 2025 to 31% in fiscal 2027. On those estimates, the stock costs 38.7 times fiscal 2026 profit and 27.7 times fiscal 2027 profit. Sales growth reached 24.8% in the most recent quarter, up from declines earlier in the year. Management said clean room space at customers' factories will limit shipments in 2027, and costs could squeeze margins. The company presents to investors on October 13, 2026, at SEMICON West.
Applied Materials chief executive officer Gary Dickerson called AI the biggest economic "inflection" point of our lifetime. He spoke about the company's $5 billion EPIC Center in Silicon Valley, its research into next-generation chips, and surging demand for AI chips. Dickerson made the remarks on "The Claman Countdown.
Applied Materials unveiled its Equipment and Process Innovation and Commercialization (EPIC) Center in Sunnyvale, California, on October 12, 2026. The $5 billion facility is billed as the world's largest dedicated to collaborative semiconductor process technology and equipment R&D. Chipmakers, systems companies, equipment partners and universities will work alongside Applied's engineers. Founding partners are TSMC, Intel, Samsung Electronics, Micron and SK hynix. Broadcom, Advantest, SCREEN, KIOXIA and Besi join as innovation partners, along with five research universities. The 600,000-square-foot building holds nearly four acres of cleanroom space. It aims to remove the handoffs between materials research, equipment development and pilot production, speeding new chip technologies to volume manufacturing for the AI era. Applied expects capital spending to scale to about $5 billion as customer projects begin.