Applied Materials Posts Highest Gross Margin in 25 Years: What the Income Statement Reveals for the Stock - TIKR.com

Applied Materials (AMAT) reported record revenue of $7.91 billion in Q2 fiscal 2026, up 11% year-over-year, with operating income reaching $2.52 billion and operating margins expanding to 32%. The com... Read original →

Applied Materials’ gross margin surpassing 50% signals AI-driven foundries’ acute dependency on atomic-scale precision tools. Its leadership in gate-all-around and advanced packaging is compelling TSMC and Samsung to adopt its EPIC co-innovation platform, locking equipment and process development into a symbiotic loop—marginalizing vendors lacking joint R&D capabilities. Geopolitically, while U.S. export controls raise compliance overhead, AMAT’s exposure to Taiwan, China and Hong Kong, China—over 40% of revenue—enhances its indispensability. In response, Lam Research will likely double down on etch dominance, while KLA may accelerate integrated metrology to counter ASML’s EUV bottlenecks. Over the next 18 months, HBM4 and 3D DRAM ramp-ups will widen margin divergence: only those mastering atomic-layer manufacturing will capture the AI infrastructure premium.