Applied Materials Projects 20% Equipment Growth, Guides Q2 Revenue at $7.65B
Applied Materials reported Q1 revenue of $7.0 billion, a 2% year-over-year decline, but topped EPS and revenue expectations, driving stock 10% higher. Management set Q2 revenue guidance at $7.65 billion (±$500 million), non-GAAP EPS at $2.64 and gross margin around 49.3%, and expects >20% equipment growth this year.
1. Q1 Earnings Beat Consensus
Applied Materials posted Q1 revenue of $7.0 billion, down 2% year-over-year, yet exceeded consensus on both adjusted EPS and revenue, lifting shares roughly 10% on the day of the release.
2. Robust Q2 Guidance
Management forecast Q2 revenue of $7.65 billion (±$500 million), non-GAAP EPS of $2.64 and gross margin near 49.3%, compared with prior Wall Street consensus of $7.03 billion, $2.29 EPS and a 48.5% margin.
3. Growth Outlook and Analyst Revisions
CEO Gary Dickerson expects semiconductor equipment business growth exceeding 20% this calendar year, weighted toward the second half with momentum into 2027; Bank of America raised its EPS estimates by 18% for 2026 to $11.86 and by 24% for 2027 to $14.57.