Applied Materials Reports $7.01B Q1 Revenue as Price Target Rises to $432
Applied Materials posted Q1 revenue of $7.01 billion, GAAP margin of 49.0% and EPS of $2.54, generated $1.69 billion cash and returned $702 million. Morgan Stanley boosted its price target to $432 and lifted wafer fab equipment growth forecasts to 23% for 2026, 27% for 2027 driven by DRAM spending.
1. Q1 Financial Results
Applied Materials generated $7.01 billion in revenue for fiscal Q1 2026 with a GAAP gross margin of 49.0%, GAAP operating income of $1.83 billion (26.1% of revenue) and EPS of $2.54. On a non-GAAP basis, gross margin was 49.1%, operating income reached $2.11 billion (30.0% of revenue) and EPS totaled $2.38.
2. Analyst Forecast Upgrades
Morgan Stanley raised its price target on Applied Materials to $432 from $420 and upgraded the wafer fab equipment market growth forecasts to 23% in 2026 and 27% in 2027, driven primarily by increased DRAM memory spending. Earlier, Erste Group initiated coverage with a Hold rating.
3. Shareholder Returns
The company generated $1.69 billion in operating cash flow during the quarter and returned a total of $702 million to investors through $337 million in share repurchases and $365 million in dividend payments.