Applied Materials Rises 11% Ahead of November 12 Earnings

By Grace Kim

Applied Materials shares rose 11% to $370.81 in afternoon trading, ahead of its FY2026 fourth-quarter results on November 12. Investors are positioning for a new read on wafer fabrication equipment spending, covering the tools chipmakers use to deposit, etch, pattern and inspect circuits on silicon wafers.

Major indexes also rose as investors returned to AI shares after the prior week’s post-midterm selloff. Nvidia traded lower on company-specific news. The equipment suppliers rarely attract the same investor attention. The AI expansion also supports demand for power, cooling and networking equipment.

• Lam Research gained 9% to $218.75. Its rebound from the previous session continued. On November 5, the company announced a $25 billion share-repurchase authorization, on top of $3 billion remaining from its prior authorization.
• ASML gained 6% to $1,514.45. KLA gained 9% to $150.86.

What does Applied Materials need to show?

Management guided to revenue of $10.25 billion, plus or minus $500 million, and non-GAAP earnings per share of $4.02, plus or minus 20 cents. Analyst consensus expects EPS of $4.06 on revenue of $10.30 billion. Those figures represent year-over-year growth of 87.1% in EPS and 51.4% in revenue.

On its August 13 earnings call, Applied said leading-edge foundry logic, DRAM and advanced packaging should drive the bulk of WFE growth in 2026 and 2027.

CEO Gary Dickerson said: “Those are the fastest growing parts of the market, and those are areas where we have clear leadership and are very well positioned going forward.”

Applied’s record DRAM revenue, including high-bandwidth memory (HBM) packaging, grew 52% year over year in Q3 FY2026.

How large is the 2027 spending opportunity?

Lam Research forecast WFE spending in the mid-$150 billion range for 2026 and more than $200 billion in 2027. The forecast also frames Applied’s opportunity, because both suppliers sell into the same semiconductor fab build-outs.

ASML raised its full-year 2026 sales outlook to between €44 billion and €45 billion on October 14. The Dutch lithography supplier acted after Q3 2026 sales topped estimates and AI demand stretched its capacity. Customers have told ASML that demand for its products will outpace supply through at least 2028.

ASML and Lam Research have also pointed to customer visibility stretching through 2028.

Dickerson said in August: “This increased demand visibility gives us high confidence that 2027 will be another strong growth year for Applied Materials.”

Why does Applied Materials have broader exposure?

Breadth sets Applied Materials apart. Its tools cover deposition, etch, chemical mechanical planarization, metrology and inspection. Applied Global Services produces recurring service revenue, and the company also operates a display business. That range allows Applied to capture spending across most steps of chip production.

Lam Research concentrates on deposition and etch, with heavy exposure to memory manufacturers. ASML holds a monopoly on extreme ultraviolet lithography, the systems that print the finest chip features. KLA dominates process control and inspection.

On forward 12-month earnings, Applied trades at 18x, the lowest multiple among the four companies. Lam Research trades at 19x, KLA at 22x and ASML at 24x.

What could reset expectations?

Applied’s fourth-quarter result and early 2027 commentary now provide the next test for the equipment rally. The company faces China export controls and a concentrated customer base. Dickerson has warned that clean-room availability will determine what Applied can ship next year.

Lam Research shares fell sharply after its October 21 report, when management said supply constraints would limit revenue. That reversal shows how quickly investor expectations can change when equipment supply threatens the revenue outlook.

Investors will need the details of Applied’s 2027 outlook before drawing conclusions about the group. A strong forecast could extend the rally, while a cautious one could reset expectations across chip equipment.