Financial Trends -- 8/10
Revenue has inflected sharply from mid-single-digit growth to +11.5% YoY in FQ2 2026 (record
$7.91B), with FQ3 2026 guided at +23% YoY ($8.95B). Non-GAAP gross margins reached a 25-year
high of 50.0%, operating margins hit 32.1%, and EPS of $2.86 was +20% YoY. Gross margin expanded
+270bps from CY23Q3 (47.3%) to CY26Q1 (50.0%). Share count declining 5.1% over 11 quarters.
FCF temporarily compressed by EPIC Center CapEx but healthy on LTM basis ($5.3B, 18.4% margin).
Management has beaten EPS guidance every quarter with accelerating beat magnitude (avg +5.2%).
Weight: 25%
FQ2 26 Revenue
$7.91B
+11.5% YoY | Record | Accelerating
FQ2 26 Gross Margin
50.0%
25-year high | +80 bps YoY
FQ2 26 Non-GAAP EPS
$2.86
+19.7% YoY | Beat guide by $0.22
FQ3 26 Guide
$8.95B
+23% YoY | EPS $3.36 (+36%)
Revenue & Growth (11 Quarters)
| Metric | FQ4 23 | FQ1 24 | FQ2 24 | FQ3 24 | FQ4 24 | FQ1 25 | FQ2 25 | FQ3 25 | FQ4 25 | FQ1 26 | FQ2 26 |
|---|---|---|---|---|---|---|---|---|---|---|---|
| Revenue ($M) | $6,717 | $6,703 | $6,653 | $6,774 | $7,040 | $7,164 | $7,097 | $7,298 | $6,803 | $7,012 | $7,910 |
| Rev YoY | — | — | — | — | +4.8% | +6.9% | +6.7% | +7.7% | -3.4% | -2.1% | +11.5% |
| Trend | — | — | — | — | — | Accel. | Stable | Accel. | Decel. | Stable | Accel. |
| Non-GAAP EPS | $2.12 | $2.13 | $2.09 | $2.12 | $2.32 | $2.38 | $2.39 | $2.48 | $2.17 | $2.38 | $2.86 |
| EPS YoY | — | — | — | — | +9.4% | +11.7% | +14.4% | +17.0% | -6.5% | 0.0% | +19.7% |
| Gross Margin | 47.3% | 47.9% | 47.5% | 47.4% | 47.5% | 48.9% | 49.2% | 48.9% | 48.1% | 49.1% | 50.0% |
| Op Margin | 29.5% | 29.5% | 29.0% | 28.8% | 29.3% | 30.6% | 30.7% | 30.7% | 28.6% | 30.0% | 32.1% |
| FCF ($M) | $1,246 | $2,096 | $1,135 | $2,088 | $2,168 | $544 | $1,061 | $2,050 | $2,043 | $1,040 | $210 |
| Diluted Shares (M) | 842 | 837 | 836 | 833 | 828 | 819 | 812 | 802 | 798 | 799 | 799 |
Key trends -- quarterly
- Revenue inflection confirmed: After turning negative in FQ4 25 (-3.4%) and FQ1 26 (-2.1%), revenue accelerated sharply to +11.5% YoY in FQ2 26 (record $7.91B). FQ3 26 guided at +23% YoY ($8.95B). The GAA ramp is now visible in the numbers.
- EPS acceleration: +19.7% YoY in FQ2 26 after flat in FQ1 26 and -6.5% in FQ4 25. FQ3 26 guided at +35.5% YoY. Beat magnitude accelerating (avg +5.2%).
- Gross margins at 25-year highs: 50.0% in FQ2 26, expanding +270bps from 47.3% two years ago. Guided ~50.1% for FQ3 26. Driven by value-based pricing on new differentiated products (GAA ALD, Sym3 etch).
- Operating margins expanding: 32.1% in FQ2 26, up +260bps from two years ago. Highest in recent history.
- FCF temporarily compressed: FQ2 26 FCF only $210M due to elevated CapEx ($635M) and inventory builds. LTM FCF remains ~$5.3B (18.4% margin).
- Share count declining steadily: 842M to 799M over 11 quarters (-5.1%), reflecting consistent buyback program.
Segment Revenue (8 Quarters)
Key trends -- segments
- Semi Systems (~75% of revenue) accelerating: FQ2 26 $5,965M, up +16% seq and +13.5% YoY. Record quarter. FQ3 26 implied ~$6,900M. Semi equipment business guided >30% growth CY2026 (raised from >20%).
- AGS (~21%) growing again: FQ2 26 $1,665M, +17% YoY. Record DRAM revenue of $1.7B in FQ2 26 driven by HBM demand.
- Display/Other (~3.5%) stabilizing: FQ2 26 $280M after lumpy quarters.
China Revenue Exposure (6 Quarters)
China declining from ~35% peaks toward mid-20s but still ~25-26% -- well above the 10% threshold.
FQ2 2026 China revenue $2,087M (26.4% of total), down from 34.9% peak in FQ3 25.
Management expects further normalization. $600-710M FY2026 revenue at risk from new
export controls. $252.5M BIS settlement (Feb 2026) for unauthorized export violations.
Consensus Estimates (40 Analysts)
| Metric | FY2026E | FY2027E |
|---|---|---|
| Revenue ($B) | $33.65B | $41.99B |
| Rev YoY | +18.6% | +24.8% |
| Non-GAAP EPS | $12.22 | $16.20 |
| EPS YoY | +41.1% | +32.6% |
- Sharp acceleration underway: EPS growth from +0.6% (FY2025) to +41% (FY2026E) and +33% (FY2027E), driven by GAA ramp, packaging growth, and HBM demand
- Revenue acceleration to +19-25%: From +4.4% in FY2025. Semi equipment guided >30% growth CY2026
- Consensus is uniformly bullish: ~40 analysts, 88%+ Buy/Strong Buy, average PT $511 (+13.7% upside)
Score rationale
Score of 8/10 reflects a sharp financial improvement with accelerating revenue, margins at 25-year highs, and strong forward guidance.
Positives: Revenue inflected to +11.5% YoY in FQ2 26 after two negative quarters. Record $7.91B revenue. FQ3 26 guided at +23% YoY. Gross margins at 25-year highs (50.0%), operating margins at 32.1%. EPS +20% YoY with accelerating beat magnitude. Share count declining 5.1%. Management has beaten EPS guidance every quarter.
Negatives: FCF temporarily compressed ($210M in FQ2 26) by elevated CapEx and inventory builds. LTM FCF healthy at $5.3B but near-term FCF margin declining. China revenue still ~26% of total.
No penalty modifiers applied. FCF positive on LTM basis, shares declining, debt stable, operating income tracking revenue direction.
Data sourced from Daloopa and AMAT earnings call transcripts. All financials in USD. Fiscal year ends ~October. Updated May 28, 2026.