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Applied Materials shares fall after Q3 beat, margin outlook stalls
The company reported Q3 revenue of $9.12 billion and non-GAAP EPS of $3.50, but gross margin guidance for Q4 did not satisfy Wall Street, with the stock down 6% after the report.
Applied Materials Inc. shares dropped about 6% after its fiscal Q3 2026 earnings release, even though the company beat analysts’ expectations on both revenue and non-GAAP earnings, and lifted guidance. MarketBeat Ratings said the reaction focused on the gross margin line, which it noted did not move as strongly as investors wanted.
In the quarter ended Aug. 13, Applied Materials posted $9.12 billion in revenue, exceeding consensus. The company also reported non-GAAP EPS of $3.50 versus the $3.40 estimate, with year-over-year growth of nearly 30%, and Semiconductor Systems generated $7.0 billion of revenue with a 55.4% gross margin.
Management guided Q4 revenue to a range of $9.75 billion to $10.75 billion, with an EPS range of $3.82 to $4.22, and MarketBeat Ratings said the gross margin guidance stood around 50.4%. The outlet also highlighted that Applied Materials expected Semiconductor Systems revenue to continue growing in fiscal 2026 and into fiscal 2027, but the sequential growth rates implied at the midpoint were lower than the most recent quarter’s pace.