This article first appeared on GuruFocus.
Applied Materials (NASDAQ:AMAT) shares fell about 5% early Friday after the semiconductor equipment maker reported fiscal third-quarter results above Wall Street expectations and lifted its outlook.
Revenue increased 25% from a year earlier to $9.12 billion, topping the $8.99 billion consensus estimate. Adjusted earnings rose 41% to $3.50 per share.
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For the fiscal fourth quarter, Applied Materials expects revenue of about $10.25 billion and adjusted earnings of $4.02 per share, both above current analyst expectations.
The company's Semiconductor Systems segment generated $7.04 billion in revenue. DRAM represented 26% of
sales, compared with 22% a year earlier. Management also raised its forecast for advanced-packaging revenue growth to more than 70% this year, up from its previous projection of above 50%.
The results come after a sharp 2026 rally in the shares, leaving investors focused on whether future growth can justify the stock's elevated valuation. The company also reported a 50.4% non-GAAP gross margin, while adjusted operating margin reached 34%.