Applied Materials Q2 2026 earnings showed continued AI equipment demand momentum and management guidance on advanced packaging and HBM capacity acceleration.

Applied Materials posted solid fiscal third-quarter results, driven by surging demand for AI infrastructure. Revenue grew 25% year on year to $9.1 billion, exceeding FactSet consensus estimates. For the fourth quarter, the company guided to $10.25 billion in sales and $4.02 in earnings per share at the midpoint, surpassing prior expectations.

The strength reflects a strengthening artificial intelligence-driven growth cycle for chip equipment. Demand for leading-edge logic, DRAM, and advanced packaging is outpacing chip supply, positioning wafer fabrication equipment for continued momentum through 2026-27.

Morningstar maintains its $520 fair value estimate for Applied Materials, citing a wide economic moat. Following a pre-earnings selloff that pulled shares below expectations, the stock now trades at levels consistent with its fundamental value.