Applied Materials Reports Tonight With Stock Down 21% and 2027 on the Line

Applied Materials guides its fiscal fourth quarter to roughly $10.25 billion in revenue — 51% growth year over year, the strongest of its fiscal year — yet the stock has fallen 21.24% over the past month into tonight's report, due around 4:00 PM ET.

That tension defines the evening. The company, trading near $391.86 after peaking at $552.70 following its Q3 filing, needs its 2027 commentary to convince investors that AI-driven semiconductor capital spending is a multiyear opportunity, not a cycle peaking in front of them. Shares still sit up 53.02% year to date, and the stock trades at roughly 34x earnings.

What did last quarter actually deliver?

Fiscal Q3 set a high bar. Revenue reached $9.115 billion, up 24.83% year over year, and non-GAAP EPS of $3.50 beat estimates by 3.11%. Semiconductor Systems non-GAAP operating margin expanded to 38.0% from 33.2%, and free cash flow came in at $2.330 billion.

On the Q3 call, CEO Gary Dickerson raised the calendar 2026 Semiconductor Systems outlook and said: "Based on the increased demand visibility we are receiving from our customers, we expect another strong growth year for Applied Materials in 2027."

Where do the estimates sit?

Consensus sits just above the midpoint of company guidance. Applied guided Q4 EPS to $4.02 plus or minus $0.20; analysts model $4.0558, up 86.90% year over year, on revenue of $10.30 billion, up 51.46%.

• Fiscal 2026: revenue estimate of $34.25 billion, EPS of $12.7938
• Fiscal 2027: revenue estimate of $46.38 billion, EPS of $18.5565

The revisions pattern tells its own story. The Q4 EPS estimate climbed from $3.6446 ninety days ago, but absorbed two down revisions in the last thirty days. Fiscal 2027 estimates collected five up revisions in that same window. Next year carries more weight than tonight's print.

What should investors watch tonight?

Semiconductor Systems. Management guided the segment to about $7.9 billion, up 62%, after Q3 DRAM revenue grew 52% to a record.

Packaging. Applied estimates packaging revenue growth above 70% in calendar 2026, with process diagnostics and control exceeding 50%.

Margins. The Q4 gross margin guide sits near 50.4% with operating expenses around $1.58 billion. After 13 consecutive quarters of gross margin expansion, hiring expenses, ramp costs and display mix could pressure profitability. Display-heavy other revenue of roughly $510 million weakens the mix — that segment's operating loss widened to $118 million from $4 million in Q3.

Capacity. Dickerson framed the constraint plainly: "clean room availability at a high level will determine what we can ship next year." China also warrants attention; its revenue share fell to 28% from 35% amid export controls.

Does an earnings beat even move the stock?

History says barely. Over the past year, shares have moved an average of just 0.105% seven days after earnings.

Quarter	EPS Surprise	Earnings-Day Move	1-Day	7-Day	30-Day
Q3 FY2026	+3.11%	-5.12%	+5.55%	-2.93%	-18.1%
Q2 FY2026	+6.56%	-0.89%	-5.28%	-1.02%	+35.8%
Q1 FY2026	+7.84%	+8.08%	+1.19%	+5.25%	-1.53%
Q4 FY2025	+2.36%	+1.25%	+1.19%	-0.88%	+9.85%

Applied has beaten estimates four quarters running, and the market has largely shrugged each time.

The scenario tonight is binary. A strong quarter paired with bullish 2027 guidance could reverse a month-long selloff. Cautious commentary on capacity expansion or clean-room constraints, though, would hand investors another reason to sell — and with fiscal 2027 consensus already modeling 35% revenue growth to $46.38 billion, Dickerson's clean-room warning is the number to watch.