Abstract

Applied Materials will report fiscal Q1 2026 results on February 12, 2026, Post Market; this preview consolidates the latest quantitative forecasts, prior-quarter performance, segment trends, and the prevailing institutional stance.

Market Forecast

Consensus for the current quarter points to revenue of USD 6.87 billion with year-over-year decline of 3.78%, EBIT of USD 2.00 billion with year-over-year decline of 6.07%, and adjusted EPS of USD 2.20 with year-over-year decline of 3.54%. Forecast detail implies margin normalization, with revenue pressure tempered by service resilience; no explicit gross profit margin or net profit margin forecast is available in the tool data. The main business is expected to be led by Semiconductor Systems, while Applied Global Services should help stabilize mix amid cyclical softness. The most promising segment is Applied Global Services, underpinned by installed-base support and subscription-like revenue characteristics; no explicit current-quarter segment revenue or year-over-year detail is provided in forecast data.

Last Quarter Review

Applied Materials delivered prior-quarter revenue of USD 6.80 billion, a gross profit margin of 48.01%, GAAP net profit attributable to the parent company of USD 1.90 billion, a net profit margin of 27.90%, and adjusted EPS of USD 2.17 with year-over-year decline of 6.47%. A key highlight was quarter-on-quarter net profit growth of 6.63%, reflecting disciplined cost control and favorable product mix despite top-line contraction. Main business highlights included Semiconductor Systems revenue of USD 20.80 billion, Applied Global Services revenue of USD 6.38 billion, and Energy and Environmental Solutions revenue of USD 1.19 billion; year-over-year changes for these segments were not provided in the tool data.

Current Quarter Outlook

Semiconductor Systems

Semiconductor Systems remains the company’s revenue anchor, with customers allocating capital to advanced node capacity, specialty process steps, and packaging transitions. Near-term orders can be influenced by memory pricing discipline and logic foundry tape-outs, which often lead to uneven equipment calendarization. Mix shifts across etch, deposition, and inspection may moderate aggregate revenue while supporting margin consistency due to higher-value tool sets. Utilization recovery at leading-edge fabs supports mid-cycle momentum, yet the forecasted decline in revenue and EBIT suggests customers are pacing deliveries and installations cautiously into fiscal Q1 2026.

Applied Global Services

Applied Global Services typically provides recurring revenue tied to the installed base, encompassing spares, upgrades, and subscriptions that enhance throughput or yield. In a cooler capital expenditure phase, services tend to offset volatility by anchoring predictable cash generation and sustaining gross profit margin. Services may benefit from optimization projects, retrofit programs, and software-enabled performance improvements. While equipment shipments ebb and flow, service engagements often scale with fab utilization and maintenance cycles, supporting resilience in the current quarter’s mix and stabilizing operational leverage even as headline revenue declines modestly.

Factors Most Impacting the Stock Price This Quarter

Stock performance is likely to hinge on revenue trajectory versus guidance, adjusted EPS execution against cost and mix, and commentary on orders visibility into the second half of fiscal 2026. Investors will parse any updates on wafer fab equipment timing across logic and memory, with emphasis on advanced-node capacity alignments and AI-related foundry investments. Margin quality will be a focal point, given prior-quarter gross profit margin of 48.01% and net profit margin of 27.90%; signals on pricing, input cost management, and services contribution could modulate sentiment. Management’s color on lead times, backlog conversion, and regional demand dynamics may influence expectations for a return to year-over-year growth later in the fiscal year.

Analyst Opinions

Recent commentary suggests a majority of institutional views lean cautiously positive, expecting the company to meet or slightly exceed adjusted EPS expectations while acknowledging softer year-over-year revenue. Bullish analysts argue that sustained services strength and disciplined execution can underpin margins near recent levels, and that visibility on AI and advanced packaging initiatives could stabilize orders into calendar mid-2026. The cautiously positive stance centers on Applied Materials’ ability to navigate cyclical pauses with installed-base monetization and operational control, which together could mitigate downside risk to consensus projections of USD 6.87 billion in revenue and USD 2.20 in adjusted EPS.