Applied Materials Jumps 11% Before Chip Equipment Earnings

24/7 Wall St. reported that Applied Materials (NASDAQ:AMAT) traded at $370.81 in afternoon trading, up 11%, ahead of its November 12 Q4 FY2026 results. Investors were positioning for a fresh reading on wafer fabrication equipment spending from a company seen as a bellwether for the group.

24/7 Wall St. defined wafer fabrication equipment, or WFE, spending as the tools chipmakers buy to deposit, etch, pattern and inspect circuits on silicon wafers. That spending determines how quickly manufacturers can expand production capacity.

The broader market also supported Applied Materials. 24/7 Wall St. said major indexes rose as investors returned to AI shares after the previous week’s post-midterm selloff. NVIDIA (NASDAQ:NVDA) traded lower on company-specific news, leaving the equipment rally distinct from the chipmaker’s move.

24/7 Wall St. placed these suppliers at the less-followed edge of the AI buildout. The source said the expansion driving the equipment cycle also depends on suppliers for power, cooling and networking, broadening the market beyond the headline chip stocks.

What has Applied Materials guided investors to expect?

Applied Materials will report Q4 FY2026 results on November 12. Management gave investors three reference points for the release.

• Revenue guidance: $10.25 billion, plus or minus $500 million.
• Non-GAAP earnings per share guidance: $4.02, plus or minus $0.20.
• Analyst consensus: $4.06 in EPS on $10.30 billion in revenue.

24/7 Wall St. reported that the consensus would represent year-over-year growth of 87.1% for EPS and 51.4% for revenue. The figures leave little room for a material revenue miss against the midpoint of company guidance.

On its August 13 call, Applied Materials said leading-edge foundry logic, dynamic random-access memory and advanced packaging should drive most WFE growth in 2026 and 2027. Those three markets connect logic production, memory capacity and the packaging required for advanced AI processors.

CEO Gary Dickerson said: “Those are the fastest growing parts of the market, and those are areas where we have clear leadership and are very well positioned going forward.”

Applied Materials also reported record DRAM revenue, including revenue from high-bandwidth memory packaging, up 52% year over year in Q3 FY2026. That result supports management’s claim that AI-related memory and packaging work will remain central to the 2027 outlook.

How large is the expected chip-equipment cycle?

Lam Research (NASDAQ:LRCX) traded at $218.75, up 9%, extending a rebound that began in the previous session. The move kept the company near the front of a broader rally across the semiconductor equipment group.

The rebound followed a November 5 announcement of a $25 billion share-repurchase authorization. Lam Research also had $3 billion remaining under its prior authorization, giving the company room to continue returning capital while investors wait for more evidence of sustained fab spending.

That buyback came after Lam Research shares fell sharply following its October 21 report. Management warned then that supply constraints would limit revenue, turning the stock’s quick recovery into a measure of investor confidence in a stronger industry outlook.

During the October 21 call, Lam Research forecast WFE spending in the mid-$150 billion range for 2026 and more than $200 billion in 2027. 24/7 Wall St. said those projections also frame the opportunity for Applied Materials because both companies sell tools into the same fab build-outs.

ASML (NASDAQ:ASML) traded at $1,514.45, up 6% with the rest of the group. On October 14, ASML raised its full-year 2026 sales outlook to €44 billion-€45 billion after Q3 2026 sales exceeded estimates as AI demand stretched its manufacturing capacity.

Customers have told ASML that demand for its products will outpace supply through at least 2028. That visibility gives the Dutch lithography supplier a longer operating horizon than the single-quarter earnings schedules driving Applied Materials and Lam Research shares.

24/7 Wall St. presented the three forecasts as reinforcing one another: memory and advanced packaging should lead near-term growth, Lam Research expects total equipment spending to exceed $200 billion in 2027, and ASML customers already see demand exceeding supply through 2028.

How do the four equipment suppliers compare?\n

KLA (NASDAQ:KLAC) traded at $150.86, up 9%, matching the broader equipment move. The four stocks also traded at sharply different forward earnings multiples, according to 24/7 Wall St.

• Applied Materials: 18x forward 12-month earnings.
• Lam Research: 19x.
• KLA: 22x.
• ASML: 24x.

Applied Materials carried the lowest multiple of the group. ASML commanded the highest valuation, while the four-company spread ranged from 18 times to 24 times earnings.

24/7 Wall St. said Applied Materials stands apart through the breadth of its product line. Its tools cover deposition, etch, chemical mechanical planarization, metrology and inspection. The company also earns recurring service revenue through Applied Global Services and operates a display business.

That range allows Applied Materials to participate in spending across most stages of chip production. Lam Research has a narrower concentration in deposition and etch, with heavy exposure to memory manufacturers.

ASML holds a monopoly on extreme ultraviolet lithography, the machines that print the finest features on advanced chips. KLA dominates process control and inspection. The source described each company as owning a deep specialty, with Applied Materials operating across the widest number of production steps.

The valuation gap therefore reflects more than near-term earnings expectations. Investors were also paying a premium for ASML’s monopoly position and KLA’s control over inspection while assigning Applied Materials the lowest multiple in the group.

What could reverse the equipment rally?

24/7 Wall St. framed the next test as whether Applied Materials’ Q4 results and early 2027 commentary justify the group’s gains. A strong order and revenue outlook could reinforce expectations for a second year of industry growth.

Dickerson stated in August: “This increased demand visibility gives us high confidence that 2027 will be another strong growth year for Applied Materials.”

ASML and Lam Research have also pointed to customer visibility stretching through 2028. Those comments give the equipment cycle more support than a single analyst forecast, although orders remain tied to manufacturers’ construction schedules and component availability.

The risks sit outside Applied Materials’ control. The company faces China export controls and a concentrated customer base, both of which could limit shipments or revenue even when end demand remains strong. Dickerson has warned that clean-room availability will determine what the company can ship next year.

Lam Research’s decline after its supply-limited October 21 outlook shows how quickly sentiment can change. A constrained shipment schedule can outweigh a favorable long-term market forecast when investors lack near-term evidence of delivery growth.

A strong Applied Materials outlook could extend the group’s rally, while a cautious one could reset expectations across chip-equipment stocks; the November 12 report and its 2027 guidance will set that direction.