The Zhitong Finance App learned that Applied Materials (AMAT.US) will release the fourth quarter and full year results of FY2026 after the market on November 12 (Thursday) EST. This is a financial report where the results were stated almost in advance: the seller's unanimous expectation was accurately anchored in the median value of the guidelines given by management three months ago. The real focus of this week isn't how much money was earned in the fourth fiscal quarter, but rather how management described 2027.
This is also the first core fab equipment (WFE) company to disclose performance after the chip stock collective fall on November 5, and its statement will be viewed as the first “order verification” of the AI capital expenditure narrative.
For the fourth quarter, sellers agreed to expect revenue of approximately $10.30 billion (up 51% year over year) and non-GAAP earnings per share of $4.06 (up 87% year over year), which almost coincides with the company's August guidance (revenue of 10.25 billion ± 500 million US dollars, EPS of 4.02 ± 0.20 US dollars). The company's EPS has exceeded expectations for 8 consecutive quarters (an average of about 5%), but after exceeding expectations in the previous quarter, the stock price fell by more than 5% the next day — the market is no longer paying for “meeting the standards.” This quarter's numbers themselves have limited information, and the real pricing variables are guiding.
Analysts are focusing on four key points:
I. FY27Q1 Guidelines and 2027 Framework
They agree that next quarter's revenue is approximately US$10.74 billion and EPS of US$4.18. Management has emphasized many times that “2027 will be another year of strong growth”, based on customers providing rolling demand forecasts for 8 consecutive quarters, but the October Investor Day only gave long-term targets for 2030 and skipped quantitative guidance for 2027, putting pressure on stock prices. If it continues to be “more qualitative and less quantified” this time around, it may be interpreted as a sign that demand is peaking. Note that FY27Q1 is a 14-week quarter, and cost concentration will mechanically affect comparability.
2. Can gross margin restart upward trend
Non-GAAP gross margin improved for 13 consecutive quarters, but stagnated at around 50.4% month-on-month. Management attributed the climbing cost of production capacity (more than 1,500 new employees added this season) and the rising share of the display business, but did not give a timeline for improvement — this is the “red flag” most likely to be questioned during a conference call.
III. China Risks
China accounts for about 26% of semiconductor systems and services revenue. Management expects growth during the year, but “does not quantify” potential new export controls. In a policy-sensitive window, any change in wording will be interpreted in amplification.
IV. Structure and Supply
The growth rate of advanced packaging has increased to over 70% (driven by HBM and 3D Chiplet), and DRAM revenue can continue at +52% year over year; at the same time, clean room space and supply chain are hard constraints. “Demand is not an issue, supply is”, and there is a risk of revenue confirmation being delayed across quarters.
“Good performance, falling stock prices” repeated
If the FY27Q1 guideline is significantly higher than US$10.7 billion and provides a quantitative growth framework for 2027, the financial report is expected to fix the valuation; if revenue falls into the second half of the guidance and only repeats “strong growth” for 2027 without numbers, it is likely that the drama of “good performance and falling stock prices” will be repeated.
As of November 6, it closed at $332.72, a retracement of about 55% from the July high, but still up about 30% from the beginning of the year. Notably, almost all of this decline was due to valuation compression — the forward price-earnings ratio has fallen from 49 times at the end of June to about 21 times (close to the five-year average), and profit expectations have not been lowered.