Applied Materials Stock Slides After Hours Despite Record Quarter

Applied Materials (Nasdaq: AMAT) shares fell more than 4% in after-hours trading Thursday, even after the semiconductor equipment giant reported record revenue and profit for its fiscal third quarter, in an apparent “sell the news” reaction following a sharp rally into the print.

The Santa Clara, Calif.-based company posted revenue of $9.12 billion for the quarter ended July 26, up 25% year-over-year and its strongest sequential growth ever. Non-GAAP earnings per share hit a record $3.50, up 41% from a year earlier, while GAAP EPS climbed 43% to $3.17. Gross margins expanded for the 13th consecutive quarter, reaching 50.4% on a non-GAAP basis.

CEO Gary Dickerson credited surging AI-driven demand for chipmaking equipment, saying Applied is raising its calendar 2026 outlook for its core Semiconductor Systems business and expects another strong growth year in 2027.

CFO Brice Hill pointed to continued strength in DRAM, leading-edge foundry-logic, and advanced packaging, and said the company is investing in additional manufacturing capacity to meet demand through decade’s end.

For the fiscal fourth quarter, Applied guided to revenue of $10.25 billion (plus or minus $500 million) and non-GAAP EPS of $4.02 (plus or minus $0.20) — both ahead of most analyst expectations.

Despite the blowout results and upbeat guidance, investors appeared to book profits after AMAT stock had already climbed roughly 105% year-to-date and rallied more than 4% in the session ahead of earnings, leaving little room for further upside surprise.

The company also expanded its EPIC Center R&D partnerships to 11, adding Broadcom, UC Berkeley and SCREEN SPE.