What does Applied Materials actually make?

Applied Materials does not make chips itself. Instead, it designs and produces vital equipment that chipmakers use to create their chips, making it an enabler for semiconductor manufacturers.

How much revenue growth is the company expecting?

Applied Materials expects at least 30% revenue growth for its semiconductor business in calendar 2026, a substantial increase from the 10.4% year-over-year growth it achieved in its fiscal 2026 second quarter.

Why has the stock price risen so much?

The stock has more than doubled year to date, reflecting investor confidence in accelerated revenue growth driven by partnerships with major chipmakers and the broader AI infrastructure boom that is fueling demand for chip production equipment.

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Applied Materials stock doubles as chip-equipment demand surges

Yahoo Finance AI2d ago5 min read

Key takeaway

Applied Materials, which designs equipment that chipmakers use to produce chips, has doubled in stock price year to date as demand surges from the AI boom. The company expects at least 30% revenue growth for its semiconductor business in calendar 2026, driven by major partnerships, though its valuation is now stretched at a P/E ratio above 50. Whether the stock remains attractive depends on whether Applied Materials can deliver the 40% to 50% quarterly growth needed to justify that valuation.

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3 Key Points

What happened
Applied Materials, the largest U.S. semiconductor equipment provider, has seen its stock more than double year to date. The company delivered 11% year-over-year revenue growth in its fiscal 2026 second quarter (ended April 26) and expects at least 30% revenue growth for its semiconductor business in calendar 2026, driven by partnerships with Taiwan Semiconductor Manufacturing, Micron, and SK Hynix.
Why it matters
Applied Materials' equipment is essential for chipmakers building AI infrastructure. The company's semiconductor segment accounted for $5.965 billion（約9500億円） of its $7.91 billion（約1.3兆円） second-quarter revenue (75% of total), and guidance for 30% growth in calendar 2026 signals that AI demand will drive substantial acceleration in upcoming quarters. The company has maintained high net profit margins of 35.5% in the recent quarter, suggesting net income should advance meaningfully.
What to watch
Applied Materials' valuation has become elevated, with the P/E ratio climbing from the mid-teens a year ago to over 50 now. To meet its 30% revenue growth guidance for calendar 2026, the company must achieve 40% to 50% revenue growth in future quarters to offset the 11% year-over-year growth recorded in Q2.

FAQ

What does Applied Materials actually make?: Applied Materials does not make chips itself. Instead, it designs and produces vital equipment that chipmakers use to create their chips, making it an enabler for semiconductor manufacturers.
How much revenue growth is the company expecting?: Applied Materials expects at least 30% revenue growth for its semiconductor business in calendar 2026, a substantial increase from the 10.4% year-over-year growth it achieved in its fiscal 2026 second quarter.
Why has the stock price risen so much?: The stock has more than doubled year to date, reflecting investor confidence in accelerated revenue growth driven by partnerships with major chipmakers and the broader AI infrastructure boom that is fueling demand for chip production equipment.

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