Applied Materials posts record Q3 revenue on AI-driven chip demand

Applied Materials Inc reported record quarterly revenue on Wednesday, driven by surging demand for semiconductor equipment amid artificial intelligence infrastructure investments.

The Santa Clara, California-based company posted third-quarter revenue of $6.65 billion, up 16% from $5.74 billion in the same period a year earlier and exceeding analysts' average estimate of $6.54 billion, according to Refinitiv data.

Net income for the quarter rose to $1.52 billion, or $1.82 per share, compared with $1.21 billion, or $1.43 per share, a year ago. Adjusted earnings per share of $1.85 also topped expectations.

Chief Executive Gary Dickerson cited "strong demand for AI-related semiconductor equipment" as a key driver, noting that orders for advanced packaging and logic chip tools remained robust. The company's backlog stood at $6.8 billion at the end of the quarter, up from $6.3 billion in April.

Analysts at Bank of America and Jefferies raised their price targets on Applied Materials following the results, reflecting confidence in sustained growth tied to AI adoption. The company's guidance for the current quarter suggests continued strength, with revenue projected between $6.7 billion and $7.1 billion.

Applied Materials supplies machinery used in semiconductor manufacturing, positioning it to benefit from global efforts to expand AI capabilities. The company's shares were up 2.3% in after-hours trading on Wednesday.

The results underscore the accelerating investment cycle in AI infrastructure, with chipmakers prioritizing equipment capable of producing high-performance processors for data centers and other AI applications.