Prediction: Applied Materials Books Its First $10 Billion Quarter This Fall

Applied Materials (NASDAQ:AMAT) has never generated $10 billion of revenue in a single quarter. Management expects the current one (the chip-equipment maker's fiscal fourth quarter of 2026, which runs through late October) to be the first. Alongside its fiscal third-quarter report last month, the company put a midpoint of $10.25 billion on fourth-quarter revenue , plus or minus $500 million, about 51% above the year-ago period.

But the milestone isn't a formality. That guidance range bottoms out at $9.75 billion, so management's own forecast leaves room to fall short of the mark.

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And shares trade around $462 as of this writing, down about 38% from their 52-week high of $739.67. Plenty of investors, it seems, still doubt how long growth like this can last.

Still, I think the company gets there. Here's a closer look at why.

Applied's fiscal third quarter (the period ended July 26) was itself record-setting, with revenue rising 25% year over year to $9.12 billion, the highest in the company's history, and non-GAAP (adjusted) earnings per share reaching a record $3.50, up 41%.

Because $9.12 billion is the standing record, even the bottom of the fourth-quarter guidance range would set a new one.

In other words, the suspense isn't about whether the quarter will be good. It's about the size of the miss it would take to keep the company under $10 billion -- more than $250 million below the guidance midpoint.

The year-over-year math gets help from a soft comparison, too. In the year-ago period, Applied's fiscal fourth-quarter revenue fell 3% to $6.80 billion.

Management keeps beating its own numbers

Growth has accelerated every quarter this fiscal year. Revenue slipped 2% year over year in the fiscal first quarter, then rose 11% in the second quarter and 25% in the third. In dollars: $7.01 billion, then $7.91 billion, then $9.12 billion, in the span of two quarters.

The company's forecasts have also run low all year. Applied guided its fiscal first quarter to $6.85 billion of revenue and delivered $7.01 billion. It guided the second quarter to $7.65 billion and delivered $7.91 billion. And it guided the third quarter to $8.95 billion and delivered $9.12 billion. Adjusted earnings per share, meanwhile, came in at or above the top of the guidance range in the first two quarters and near the top in the third.