Applied Materials Logs Record Quarter as DRAM Tool Sales Climb

What happened

Applied Materials reported fiscal fourth-quarter revenue up 53% to a record $10.41 billion, with non-GAAP earnings per share of $4.16. Its main equipment unit’s revenue rose 64%, and DRAM tools grew to 33% of that unit’s sales. The company forecast first-quarter revenue of about $11.1 billion.

Confirmed

Global impact / market context

Record sales and a higher share of DRAM tools show strong demand for equipment used to make memory and advanced chips. Better product mix and higher pricing lifted gross margin, meaning the share of sales left after direct production costs. This supports earnings, though output capacity limits growth.

Analyst inference

Applied expects wafer fab equipment spending, meaning money spent on tools for chip factories, to grow more than 30% in 2027 as advanced-chip demand exceeds supply. Its plan to double system output by fiscal 2028 may help capture demand, but cleanroom limits constrain industry deliveries.

Analyst inference

What to watch

1. Compare first-quarter revenue and non-GAAP earnings per share with the company’s forecast; results below it could signal that strong demand is not translating into near-term sales. Analyst inference
2. Track progress toward doubling systems output by fiscal 2028, especially whether cleanroom capacity remains a bottleneck that restricts deliveries and delays revenue growth. Analyst inference
3. Watch DRAM’s share of Semiconductor Systems sales and gross margin, which measures sales left after direct production costs, for signs that product mix and pricing remain supportive. Analyst inference

Evidence

• gurufocus.com