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The AI buildout is turning Applied Materials (AMAT) into A profit machine. Published on August 27, 2026 at 4:35 pm by maham fatima in hedge funds, news. On August 13, Applied Materials (NASDAQ:AMAT) reported the biggest quarter-over-quarter revenue jump in its history, and the numbers back up the headline. Revenue climbed to $9.12 billion, up 25% year over year, while non-GAAP earnings per share jumped 41% to $3.50. Behind those figures sits a company that says its main constraint right now isn't finding customers; it's building fast enough to keep up with them. A backlog that keeps growing. Management's core argument is that demand for advanced chips is running well ahead of what the industry can supply, and that gap is showing up directly in Applied's order book. Customers are now handing the company rolling eight-quarter forecasts, with some conversations stretching out to 2030, and more than 10 new fab projects were announced in the quarter alone. That visibility is already showing up in the segment results. DRAM revenue, boosted by high bandwidth memory packaging, grew 52% year over year to a record, and advanced packaging overall is now projected to grow more than 70% in calendar 2026 as chipmakers shift toward 3D chiplet stacking. Applied added Broadcom as an EPIC innovation partner during the quarter, bringing its total count of these co-development partnerships to 11, spanning chipmakers, system companies and research universities. Process diagnostics and control revenue is tracking to grow more than 50% this year, faster than the overall systems business. None of this has come at the expense of profitability. Non-GAAP gross margin reached 50.4%, marking the 13th straight quarter of year-over-year expansion, and operating margin hit a record 34%. Guidance for the next quarter calls for revenue of $10.25 billion, which would be a 51% increase from a year earlier. The price of growing fast. That growth isn't free. Chief Financial Officer Brice Hill said the company expects its tax rate to rise to roughly 13% in 2027 as it absorbs the impact of the global minimum tax, a direct hit to the bottom line that has nothing to do with operations. Hill also pointed to "ramp costs that are in the forecast," a reference to the more than 1,500 people Applied hired this quarter in manufacturing and customer support to keep pace with demand. New hires take time to reach full productivity, which means near-term expense growth may outpace revenue in some periods even as the top line surges. Applied is also flagging that its fiscal first quarter of 2027 will run 14 weeks instead of the usual 13, producing a higher-than-normal step-up in operating expenses for that period. On top of that, Chief Executive Gary Dickerson acknowledged that customers have historically been constrained by clean room space when it comes to taking tool deliveries, a structural bottleneck that, even as customers find workarounds, could resurface if capacity additions don't keep pace with equipment orders. Layer in that China still accounted for 28% of total revenue, and any shift in export rules or regional demand remains a variable the company doesn't fully control. Wall street's quiet confidence. Hedge fund interest in Applied Materials held essentially flat going into this report, with 137 funds holding a position in the most recent quarter compared with 138 in the prior one, which reads as neither accumulation nor retreat. Short interest sits at just 1.50% of the float, a level that signals almost no organized skepticism toward the stock. As of August 27, investors are paying a forward P/E of 27.17 for that growth profile, a multiple that only makes sense if the current AI-driven capacity boom keeps compounding rather than leveling off. The open question. Applied Materials is heading into fiscal 2027 with more demand visibility than management says it has ever had, and margins that have now expanded for 13 consecutive quarters. Still, a rising tax rate, a wave of new hires still ramping into productivity, and a longer fiscal quarter next year all chip away at the operating leverage that got the company here. The fab and packaging investments now underway need to turn into shipped systems without running into the clean room bottlenecks that have slowed deliveries in the past.

Applied Materials, Inc. $AMAT is Polymer Capital Management HK LTD's 4th largest position. August 26, 2026 Polymer Capital Management HK LTD grew its holdings in Applied Materials, Inc. (NASDAQ:AMAT - Free Report) by 1,747.0% during the second quarter, according to the company in its most recent disclosure with the Securities & Exchange Commission. The firm owned 61,986 shares of the manufacturing equipment provider's stock after purchasing an additional 58,630 shares during the period. Applied Materials comprises approximately 2.3% of Polymer Capital Management HK LTD's holdings, making the stock its 4th largest holding. Polymer Capital Management HK LTD's holdings in Applied Materials were worth $44,816,000 as of its most recent SEC filing. Several other institutional investors and hedge funds have also made changes to their positions in the business. Caldwell Investment Management Ltd. bought a new stake in shares of Applied Materials in the second quarter valued at about $1,589,000. Evolve Private Wealth LLC grew its holdings in Applied Materials by 59.0% during the 1st quarter. Evolve Private Wealth LLC now owns 2,875 shares of the manufacturing equipment provider's stock worth $983,000 after acquiring an additional 1,067 shares in the last quarter. WealthPlan Investment Management LLC bought a new position in Applied Materials during the 4th quarter worth about $1,082,000. Ameritas Advisory Services LLC increased its position in Applied Materials by 183.7% during the 4th quarter. Ameritas Advisory Services LLC now owns 3,073 shares of the manufacturing equipment provider's stock valued at $790,000 after purchasing an additional 1,990 shares during the period. Finally, Handelsbanken Fonder AB increased its position in Applied Materials by 29.6% during the 2nd quarter. Handelsbanken Fonder AB now owns 462,685 shares of the manufacturing equipment provider's stock valued at $334,521,000 after purchasing an additional 105,776 shares during the period. 80.56% of the stock is currently owned by institutional investors. More Applied Materials news. Here are the key news stories impacting Applied Materials this week: * Positive Sentiment: Goldman Sachs reportedly named Applied Materials a "top pick," citing the company's exposure to the continued buildout of AI infrastructure and chip-manufacturing capacity. Applied Materials Stock Is Named a Top Pick at Goldman Sachs * Positive Sentiment: Analysts see significant upside after the stock's decline from its high, with AI-driven semiconductor investment and record quarterly revenue supporting bullish price targets. One report cited an average target near $641, implying roughly 32% potential appreciation from recent levels. Wall Street Sees Rally Despite Decline From Peak * Positive Sentiment: Applied Materials is viewed as a key beneficiary of AI infrastructure spending because its equipment and engineering solutions are essential to advanced semiconductor manufacturing. Why Investors Should Buy the Dip in AMAT * Neutral Sentiment: Mizuho lowered its Applied Materials price target from $650 to $590 but retained an "outperform" rating. The reduced target reflects more cautious expectations, while the rating still indicates confidence in the company's longer-term prospects. Benzinga * Neutral Sentiment: The reported August short-interest figures show zero shares and a mathematically invalid change, making the data unreliable and unlikely to provide a meaningful trading signal. * Negative Sentiment: Semiconductor stocks broadly declined as investors reduced risk ahead of NVIDIA's results, weighing on Applied Materials alongside other chipmakers. Semiconductor Stocks Slide Ahead of NVIDIA Earnings Wall Street analyst weigh in. AMAT has been the subject of several research reports. Jefferies Financial Group upped their price target on shares of Applied Materials from $510.00 to $770.00 and gave the stock a "buy" rating in a research report on Friday, June 26th. HSBC reissued a "buy" rating and set a $683.00 price objective on shares of Applied Materials in a report on Monday, July 27th. Citigroup restated a "buy" rating on shares of Applied Materials in a report on Monday, August 3rd. UBS Group set a $675.00 target price on Applied Materials and gave the company a "buy" rating in a research report on Friday, August 14th. Finally, B. Riley Financial reiterated a "buy" rating and issued a $700.00 price target (down from $790.00) on shares of Applied Materials in a report on Friday, August 14th. One analyst has rated the stock with a Strong Buy rating, twenty-seven have issued a Buy rating and five have issued a Hold rating to the stock. According to data from MarketBeat, the company has an average rating of "Moderate Buy" and a consensus price target of $657.76. Discover more MarketBeat Research Tools investment Insider buying and selling. In other Applied Materials news, Director Thomas J. Iannotti sold 9,250 shares of the firm's stock in a transaction dated Tuesday, June 16th. The stock was sold at an average price of $599.77, for a total value of $5,547,872.50. Following the completion of the sale, the director owned 40,559 shares of the company's stock, valued at approximately $24,326,071.43. This trade represents a 18.57% decrease in their ownership of the stock. The sale was disclosed in a legal filing with the Securities & Exchange Commission, which can be accessed through the SEC website. Also, insider Prabu G. Raja sold 10,000 shares of the business's stock in a transaction dated Thursday, June 18th. The stock was sold at an average price of $633.53, for a total value of $6,335,300.00. Following the sale, the insider owned 346,642 shares in the company, valued at $219,608,106.26. The trade was a 2.80% decrease in their position. The disclosure for this sale is available in the SEC filing. Insiders sold a total of 276,692 shares of company stock valued at $169,030,834 in the last 90 days. 0.30% of the stock is owned by insiders. Applied Materials price performance. NASDAQ AMAT opened at $480.04 on Wednesday. The firm's fifty day simple moving average is $558.87 and its two-hundred day simple moving average is $454.37. The firm has a market capitalization of $380.96 billion, a P/E ratio of 41.38, a P/E/G ratio of 1.04 and a beta of 1.61. The company has a current ratio of 2.42, a quick ratio of 1.79 and a debt-to-equity ratio of 0.20. Applied Materials, Inc. has a 12-month low of $154.46 and a 12-month high of $739.67. Applied Materials (NASDAQ:AMAT - Get Free Report) last issued its quarterly earnings data on Thursday, August 13th. The manufacturing equipment provider reported $3.50 EPS for the quarter, beating the consensus estimate of $3.40 by $0.10. The firm had revenue of $9.12 billion during the quarter, compared to analyst estimates of $8.99 billion. Applied Materials had a return on equity of 38.02% and a net margin of 30.05%.The business's revenue for the quarter was up 24.8% compared to the same quarter last year. During the same quarter in the prior year, the business posted $2.48 EPS. Applied Materials has set its Q4 2026 guidance at 3.820-4.220 EPS. Analysts forecast that Applied Materials, Inc. will post 12.73 EPS for the current fiscal year. Applied Materials dividend announcement. The firm also recently declared a quarterly dividend, which will be paid on Thursday, September 10th. Shareholders of record on Thursday, August 20th will be paid a $0.53 dividend. The ex-dividend date is Thursday, August 20th. This represents a $2.12 dividend on an annualized basis and a yield of 0.4%. Applied Materials's dividend payout ratio (DPR) is 18.28%. About Applied Materials. Applied Materials, Inc is a U.S.-based supplier of equipment, services and software used to manufacture semiconductor chips, flat panel displays and other advanced materials. Headquartered in Santa Clara, California, the company designs and sells capital equipment and related technologies that enable production of integrated circuits, display panels and materials used across the electronics supply chain. Applied Materials' offerings include process equipment and factory software that support critical steps in device fabrication, such as deposition, etch, implantation, inspection and metrology, as well as systems for packaging and advanced heterogeneous integration. This instant news alert was generated by narrative science technology and financial data from MarketBeat in order to provide readers with the fastest reporting and unbiased coverage. Please send any questions or comments about this story to [email protected]. Continue following MarketBeat Before you consider Applied Materials, you'll want to hear this. MarketBeat keeps track of Wall Street's top-rated and best performing research analysts and the stocks they recommend to their clients on a daily basis. MarketBeat has identified the five stocks that top analysts are quietly whispering to their clients to buy now before the broader market catches on... and Applied Materials wasn't on the list. While Applied Materials currently has a Moderate Buy rating among analysts, top-rated analysts believe these five stocks are better buys. 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