Applied Materials Shares Fall 5% as AI Growth Bar Rises After Record Quarter

Applied Materials shares fell about 5% in premarket trading on August 14, a day after the semiconductor equipment maker reported record quarterly results and raised its outlook for semiconductor systems growth. The reaction came after the stock had more than doubled this year, raising expectations for faster growth relative to its peers.

The company reported fiscal third-quarter revenue of $9.12 billion, up 25% from a year earlier, while non-GAAP earnings per share reached $3.50, up 41%. Revenue and earnings both exceeded Wall Street estimates.

AI Demand Is Lifting Semiconductor Equipment Spending

Applied Materials' outlook remains closely tied to the expansion of AI infrastructure. Chief Executive Gary Dickerson said demand had strengthened during the quarter, particularly across leading-edge logic, DRAM and advanced packaging.

The company now expects its Semiconductor Systems business to grow more than 30% in calendar 2026, an increase from its previous outlook of more than 30% after earlier raising the forecast from more than 20%. Management also expects Applied Global Services to grow more than 20% and advanced packaging revenue to increase more than 70% this year.