Core Viewpoint - Applied Materials forecasts second-quarter revenue and profit above market estimates, driven by demand for AI processors and a global memory shortage [1][2] Group 1: Financial Performance - The company expects second-quarter sales of approximately $7.65 billion, with a margin of plus or minus $500 million, compared to market estimates of $7.01 billion [2] - Applied Materials reported first-quarter revenue of $7.01 billion, exceeding estimates of $6.87 billion, with record DRAM sales year-on-year [6] - The first-quarter profit was reported at $2.38 per share, excluding items, surpassing analyst expectations of $2.20 per share [8] Group 2: Market Drivers - The rapid expansion of AI infrastructure is significantly boosting demand for chipmaking equipment, which is a major driver for Applied Materials [1][2] - The need for higher performance and energy-efficient chips is leading to high growth rates in leading-edge logic, high-bandwidth memory, and advanced packaging [3] - Memory and logic-foundry capital expenditure growth are both significant, with memory being a greater growth driver in the near term [4] Group 3: Future Outlook - Applied Materials anticipates that DRAM will be its fastest-growing segment by 2026, alongside 3D chiplet stacking technology used in AI processors [5] - The company forecasts an adjusted profit of about $2.64 per share for the second quarter, with a margin of plus or minus 20 cents, compared to estimates of $2.28 [3]

Financial Performance - Applied Materials reported first quarter revenue of $7.01 billion, a decrease of 2% year over year[3]. - Net income for the quarter was $2.03 billion, up 71% from $1.18 billion in Q1 FY2025[7]. - Diluted earnings per share (EPS) increased by 75% to $2.54, compared to $1.45 in the same quarter last year[7]. - For Q2 FY2026, total revenue is projected to be approximately $7.65 billion, with non-GAAP diluted EPS expected to be around $2.64[9]. - The company reported a non-GAAP net income of $1,899 million for the three months ended January 25, 2026, compared to $1,946 million in the same period last year[23]. Margins and Profitability - GAAP gross margin was 49.0% and non-GAAP gross margin was 49.1%, reflecting a slight increase from 48.8% in the previous year[6]. - Non-GAAP gross profit was $3,442 million for the three months ended January 25, 2026, slightly down from $3,503 million in January 2025, resulting in a non-GAAP gross margin of 49.1%[23]. - Semiconductor Systems reported a non-GAAP gross profit of $2,801 million, down from $2,993 million year-over-year, with a non-GAAP gross margin of 54.5%, up from 53.5%[29]. - Applied Global Services achieved a non-GAAP gross profit of $537 million, maintaining the same level as the previous year, with a non-GAAP gross margin of 34.4%, an increase from 32.3%[29]. Cash Flow and Capital Expenditures - The company generated $1.69 billion in cash from operations and returned $702 million to shareholders through share repurchases and dividends[4]. - Cash provided by operating activities rose to $1,686 million in January 2026, compared to $925 million in January 2025, marking an increase of 82.2%[20]. - Non-GAAP free cash flow for the quarter was $1,040 million, significantly up from $544 million in the same period last year[33]. - Capital expenditures for the three months ended January 25, 2026, were $646 million, up from $381 million in January 2025[20]. - Capital expenditures rose to $646 million, up from $381 million year-over-year[33]. Business Outlook and Growth - The semiconductor equipment business is expected to grow over 20% in calendar year 2026, driven by demand for AI computing[5]. - New product introductions include systems for Gate-All-Around (GAA) transistors, enhancing energy efficiency and performance at 2nm and beyond[8]. - Samsung Electronics will join Applied's new EPIC Center, aimed at accelerating the commercialization of breakthrough technologies[8]. Assets and Liabilities - Total assets increased to $37,644 million in January 2026, up from $36,299 million in January 2025, representing a growth of 3.7%[19]. - Total liabilities increased slightly to $15,927 million in January 2026 from $15,884 million in January 2025[19]. Workforce and Restructuring - The workforce decreased to 35,500 employees in January 2026 from 36,000 in January 2025[21]. - The company incurred restructuring charges of $12 million during the quarter[31]. Legal and Compliance - A legal settlement charge of $253 million was recorded related to export controls compliance matters[30]. Taxation - The GAAP effective income tax rate was reported at 13.0%, while the non-GAAP effective income tax rate was 11.0%[31].

Core Insights - Applied Materials reported strong first-quarter results, driven by increased industry investments in AI computing and semiconductor technologies [4][7][9] Financial Performance - Revenue for Q1 FY2026 was $7.01 billion, a decrease of 2% compared to Q1 FY2025's $7.17 billion [5][7] - GAAP gross margin was 49.0%, while non-GAAP gross margin was 49.1%, showing slight improvements year-over-year [5][7] - Operating income on a GAAP basis was $1.83 billion (26.1% of net revenue), and on a non-GAAP basis, it was $2.11 billion (30.0% of net revenue) [2][5] - Net income increased by 71% to $2.03 billion, with diluted earnings per share (EPS) rising 75% to $2.54 [5][7] Cash Flow and Shareholder Returns - The company generated $1.69 billion in cash from operations and returned $702 million to shareholders through share repurchases and dividends [3][5] - Non-GAAP free cash flow for the quarter was $1.04 billion, a 91% increase from $544 million in the previous year [5][34] Business Outlook - For Q2 FY2026, Applied expects total revenue of approximately $7.65 billion, with non-GAAP diluted EPS projected at $2.64 [9] - The semiconductor equipment business is anticipated to grow over 20% in the calendar year, driven by demand for advanced technologies [4][9] Segment Performance - Semiconductor Systems revenue was $5.14 billion, down from $5.60 billion in the previous year, with a gross margin of 54.3% [11][12] - Applied Global Services reported revenue of $1.56 billion, up from $1.35 billion, with a gross margin of 34.4% [13][12] Recent Developments - Samsung Electronics will join Applied's new EPIC Center in Silicon Valley, aimed at accelerating the commercialization of breakthrough technologies [6][12] - The company introduced new systems to enhance the performance of next-generation transistors, receiving awards for technology development and sustainability [12][19]

Core Viewpoint - The article discusses the settlement between the U.S. Department of Commerce and Applied Materials regarding illegal exports of semiconductor manufacturing equipment to China, highlighting the implications for the semiconductor industry and regulatory environment [2][4]. Group 1: Settlement Details - The U.S. Department of Commerce announced a settlement of $252 million with Applied Materials due to allegations of illegal exports of semiconductor manufacturing equipment to China [2]. - The core equipment involved, ion implantation machines, were shipped to South Korea for assembly before being sent to China without the necessary export licenses [4]. - The illegal goods exported to China were valued at approximately $126 million, and the fine imposed is double the value of the goods, representing the maximum penalty allowed by law [4]. Group 2: Regulatory Context - The settlement marks the second-highest fine ever issued by the Department of Commerce's Bureau of Industry and Security [4]. - Applied Materials expressed satisfaction with the resolution and noted that investigations by the U.S. Department of Justice and the U.S. Securities and Exchange Commission have been terminated without further action [4]. - In 2023, reports indicated that Applied Materials was under criminal investigation for allegedly circumventing export restrictions to Chinese wafer foundries [4].

Corporate Earnings and Market Reactions - Corporate earnings continue to attract investor attention, with notable results from companies like Restaurant Brands, Birkenstock, Howmet Aerospace, and Exelon [9] - AI-driven disruption is impacting companies, leading markets to penalize sectors perceived to face increased competition [9][10] - Software shares have been declining, with brokerage firms also reporting losses [10] Company-Specific Developments - AppLovin shares fell by 4.8% after disappointing fourth-quarter results, losing nearly a third of their value in the first six weeks of the year due to rising competition [6][10] - Cisco shares dropped 8% in premarket trading after reporting a quarterly adjusted gross margin that fell below expectations [6][10] - Applied Materials shares decreased by 1% following a $252 million settlement with the U.S. Department of Commerce for illegally exporting chipmaking equipment to China [8][10] Trade Relations - The U.S. and China may extend their trade truce for up to a year, with a meeting between President Trump and President Xi Jinping anticipated in early April [7][10] - The U.S. House of Representatives has narrowly supported a measure disapproving of Trump's tariffs on Canada, aiming to terminate the use of a national emergency for imposing punitive trade measures [7][10]

Core Insights - Results are expected from Airbnb, Applied Materials, and Coinbase, indicating significant upcoming financial disclosures that may impact their respective industries and stock performance [1] Group 1: Company-Specific Insights - Airbnb is set to release its financial results, which will provide insights into its recovery trajectory post-pandemic and the overall health of the travel and hospitality sector [1] - Applied Materials is anticipated to report its earnings, which will shed light on the semiconductor industry's current state and future outlook, particularly in relation to technology demand [1] - Coinbase's upcoming results will be crucial for understanding the cryptocurrency market's dynamics and the company's performance amidst regulatory challenges and market volatility [1]

Core Viewpoint - Applied Materials, Inc. has reached a settlement with the U.S. Department of Commerce regarding allegations of non-compliance with export regulations related to shipments to China, agreeing to pay $252.5 million [1][2]. Group 1: Settlement Details - The settlement resolves allegations that certain customer shipments to China between November 2020 and July 2022 did not comply with U.S. Export Administration Regulations due to a misunderstanding by the company [1]. - The U.S. Department of Justice and the SEC have closed their investigations related to this matter without taking any action against the company [1][2]. - The company believes that resolving this issue is in the best interest of its customers, employees, and shareholders [2]. Group 2: Compliance and Future Focus - Integrity and compliance are emphasized as core values of the company, which remains committed to strong export-control and trade-compliance practices globally [2]. - With the resolution of this matter, the company is focused on executing its technology roadmap and supporting the demand for next-generation semiconductor innovation [2][4]. Group 3: Company Overview - Applied Materials, Inc. is a leader in materials engineering solutions essential for semiconductor and advanced display technologies, playing a crucial role in advancing AI and next-generation chip commercialization [4].

Core Viewpoint - The U.S. Department of Commerce has reached a $252 million settlement with Applied Materials regarding allegations of illegal exports of semiconductor manufacturing equipment to China [1] Company Summary - Applied Materials is involved in a legal settlement concerning the export of U.S. semiconductor manufacturing equipment [1] - The settlement amount is $252 million, indicating significant financial implications for the company [1] Industry Summary - The case highlights ongoing regulatory scrutiny in the semiconductor industry, particularly regarding exports to China [1] - This incident may impact the operational strategies of companies within the semiconductor manufacturing sector, as compliance with export regulations becomes increasingly critical [1]

By Karen Freifeld and Jasper Ward WASHINGTON, Feb 11 (Reuters) - The U.S. Department of Commerce on Wednesday announced a $252 million settlement with ‌Applied Materials for illegally exporting chipmaking equipment to China's top chipmaker ‌Semiconductor Manufacturing International Corp. In 2023, Reuters exclusively reported that Applied Materials was under U.S. criminal ​investigation for producing semiconductor equipment in Massachusetts, then shipping the equipment to a subsidiary in South Korea, befo ...

Applied Materials, Inc. (NASDAQ:AMAT) is included among the 13 Best Roth IRA Stocks to Buy Now. B. Riley Raises Applied Materials, Inc. (AMAT) Price Target to $400, Reaffirms Buy On February 9, B. Riley raised its price recommendation on Applied Materials, Inc. (NASDAQ:AMAT) to $400 from $365. It reiterated a Buy rating on the stock. The firm said it expects strong fiscal first-quarter results, with performance likely coming in modestly above consensus estimates. That same day, CNBC reported comments fr ...