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FY2025 Q4
Improving
Applied Materials, Inc. earnings call
Buzzberg read
2026 expected to be growth year, weighted to second half
Applied Materials delivered a record FY2025, but the market is focused on its upbeat 2026 outlook, which expects a significant growth inflection in the second half of calendar 2026 driven by AI-led demand for leading-edge logic and DRAM. Management cited improved customer visibility, with some providing 1-2 years of demand foresight, and highlighted a favorable spending mix that plays to their strengths. FY2025 revenue grew 4% to $28.4B, with non-GAAP gross margins reaching a 25-year high of 48.8%.
Buzzberg read 2026 expected to be growth year, weighted to second half Applied Materials delivered a record FY2025, but the market is focused on its upbeat 2026 outlook, which expects a significant growth inflection in the second half of calendar 2026 driven by AI-led demand for leading-edge logic and DRAM. Management cited improved customer visibility, with some providing 1-2 years of demand foresight, and highlighted a favorable spending mix that plays to their strengths. FY2025 revenue grew 4% to $28.4B, with non-GAAP gross margins reaching a 25-year high of 48.8%. Read full analysisCollapse analysis
Applied Materials delivered a record FY2025, but the market is focused on its upbeat 2026 outlook, which expects a significant growth inflection in the second half of calendar 2026 driven by AI-led demand for leading-edge logic and DRAM. Management cited improved customer visibility, with some providing 1-2 years of demand foresight, and highlighted a favorable spending mix that plays to their strengths. FY2025 revenue grew 4% to $28.4B, with non-GAAP gross margins reaching a 25-year high of 48.8%.
- China revenue normalized to 29% of total revenue in Q4 FY25, down from a peak of 45% in Q1 FY24.
- Management expects a significant uptick in WFE spending in the second half of calendar 2026, driven by leading-edge logic, DRAM, and HBM.
- Customers are providing over a year of demand visibility, signaling high confidence in a sustained AI-driven capex up-cycle.
AGS Revenue$6.4BReported
Revenue$6.8BReported
EPS$2.17Reported
Gross margin48.01%Reported
6 grounded callouts
What matters now
The highest-signal changes from the call.
Demand
Customers flag WFE acceleration in second half of calendar 2026
Demand
Demand visibility has extended to one-to-two years
Show 3 more callouts
Products
PVD franchise expected to keep ramping on four-node visibility
Demand
Leading-edge logic seen as 2026's strongest grower, DRAM second
Trade
China ICAPS share held flat where Applied can compete
Reported period
Actuals
| Metric | Reported | Change |
|---|---|---|
| AGS Revenue | $6.4B | Reported |
| Revenue | $6.8B | Reported |
| EPS | $2.17 | Reported |
| Gross margin | 48.01% | Reported |
| Operating margin | 25.18% | Reported |
| Free cash flow | $2.043B | Reported |
Forward-looking
Forward guidance
| Metric | Period | Range | Midpoint | Status |
|---|---|---|---|---|
| EPS | FY2026 Q1 | $1.98–$2.38 | $2.18 | Guided |
| Gross margin | FY2026 Q1 | 48.4% | 48.4% | Guided |
| Revenue | FY2026 Q1 | $6.35B–$7.35B | $6.85B | Guided |
AI, capex & demand read
Management read
Confident
Executives repeatedly cited record results, strong technology positions, improved visibility, and multiple growth drivers for 2026 despite trade-restriction headwinds.
Management AI read
Management framed AI as a secular tipping point creating a virtuous cycle: better AI economics expands applications and demand for AI compute capacity. They expect AI data center investment to drive the fastest growth in leading-edge foundry logic, DRAM/HBM, and advanced packaging, where Applied claims strong #1 positions.
Investment and capacity
Applied is preparing its supply chain and operations for a customer WFE spending inflection in the second half of calendar 2026; internal capex remains elevated with $2.3B spent in FY25, over half on the EPIC Center. Management sees improved customer visibility and expects growth weighted to 2H26.
all 5 named companies below
Companiesreturns since call
Customers
Customers
Gary Dickerson
Record revenue in Korea points to strong investment from memory and foundry customers like Samsung, particularly in DRAM and HBM technologies.
Evidence
“we posted record revenue in both Taiwan and Korea”
Customers
Gary Dickerson
Management confirms NVIDIA's massive AI infrastructure projections are driving customer demand visibility and capacity planning across the semiconductor supply chain.
Evidence
“the world has clearly changed since NVIDIA reported August 26th and discussed $3 to $4 trillion in AI infrastructure spending”
Supply chain
Supply chain
Bryce Hill
Management reveals they are getting more than one year, sometimes two years, of demand visibility from customers for advanced fab ramps. — Longer lead-time visibility suggests a high-confidence, sustained up-cycle in advanced semiconductor capex, likely benefiting the entire equipment supply chain.
Evidence
“we'll just admit, I think we've been wrong for two years in a row, forecasting a digestion related to China, and it's been stronger each year.”
External signals
Supply-chain alpha · 2returns since call
China's WFE spending is expected to decline in 2026, but management admits they've been wrong about this for two consecutive years.
Management reveals they are getting more than one year, sometimes two years, of demand visibility from customers for advanced fab ramps.
Evidence
“we're getting more than one year visibility, in some cases two years visibility with a number of these different customers”
Methodology & coverage
Management-only analysis. All 5 validated company mentions are shown. Reported actuals and forward guidance are kept separate. Public evidence is limited to eight short attributed quotes. AI-generated analysis can be incomplete or wrong; verify important claims against the original source.