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# Applied Materials reports Thursday: a $10.30B bar, a 34.71% drawdown, and a margin that has to hold
- URL: https://www.altamiraequity.com/amat-q4-fy2026-earnings-preview/
- Published: 2026-11-09T18:03:03.000Z
- Updated: 2026-11-10T07:18:20.000Z
- Description: Consensus wants $10.30B of revenue and EPS of 4.06 from Applied Materials on Thursday — a 51.47% jump on last year's quarter — from a stock that has lost 34.71% in a month. Eight straight beats say the company usually clears the bar; the tape says the bar is no longer the question.
- Author: Altamira Capital
- Tags: Research, Earnings, Semiconductors, AMAT, #qc-pass

*Consensus EPS 4.06 and revenue $10.30B · implied +51.47% YoY and +13.00% QoQ · eight straight beats, average EPS surprise +4.88% · stock −34.71% in one month, 25.29% below its 200-day average*

### The story in 30 seconds

- Applied Materials (AMAT) reports its fiscal fourth quarter, the period ended October 26, 2026, on Thursday, November 12, after the close. The Street's bar is $10.30B of revenue and EPS of 4.06 — against $6,800.0M and 2.17 reported for the same quarter a year ago, a 51.47% revenue jump and an 87.10% earnings jump.
- The record says the company clears bars: eight A or B grades in its last eight prints, an average EPS surprise of +4.88%, and a last quarter that beat on both lines (revenue $9,115.0M, +1.33% vs estimate; EPS 3.50, +2.94%).
- The tape has stopped paying for beats. The last beat was sold 5.12% the next session; the stock has fallen 34.71% in a month and 36.28% over three, and sits 25.29% below its 200-day average. Thursday is not about whether the bar is cleared. It is about whether the margin structure that produced the run is still intact at the new revenue scale.

Every earnings season has a print where the result matters less than the shape of it. Applied Materials' fourth quarter is that print. A company that has beaten consensus eight quarters running, that grew revenue 24.83% year over year last quarter with operating margin up 315 bp, now walks in with its shares more than halved from the 52-week high of 723.00 — and consensus still asking for a quarter 13.00% larger than the last one.

In this preview: (1) the set-up — where the stock stands, in levels; (2) the bar — exactly what consensus wants and what it implies; (3) the record — how the company and the stock have behaved on the last eight prints; (4) what the print has to prove, line by line; (5) the honest counterweight; and (6) what we will grade on Friday morning.

### The set-up — levels, not targets

On the November 6 close of 332.72 the shares were:

- 25.20% below the 50-day average of 444.84 and 25.29% below the 200-day average of 445.35 — both averages sit within a dollar of each other, which is what a vertical decline through both looks like in the data;
- 53.98% below the 52-week high of 723.00 and 51.08% above the 52-week low of 220.23;
- down 34.71% over one month and 36.28% over three, yet still up 42.47% over twelve — the round trip of an AI-equipment multiple that expanded and then compressed inside one year.

The stock's last session in the dataset was a bounce: +4.22% on the day, to a market capitalisation of $264.04B. At that price the shares trade on 28.51× trailing earnings with a 2.13% free-cash-flow yield and a 0.60% dividend yield. The Altamira KPI Scorecard edition of November 7 carries the same tension in its cells: a fundamental composite of 69.4 (quality 82.3, health 93.1, moat 81.4) against a technical score of 17.9, trend state DRIFTING, Tier 4, rank 216 of the universe. The fundamentals half of the scorecard has not moved; the technical half has collapsed.

### The bar — what consensus wants

| Line    | Consensus (FMP, pulled November 9) | Last quarter (Q3 FY2026) | Same quarter last year (Q4 FY2025) | Implied change            |
| ------- | ---------------------------------- | ------------------------ | ---------------------------------- | ------------------------- |
| Revenue | $10.30B                            | $9,115.0M                | $6,800.0M                          | +51.47% YoY · +13.00% QoQ |
| EPS     | 4.06                               | 3.50                     | 2.17                               | +87.10% YoY               |

Two things about the bar. First, it is a step up, not a step along: a 13.00% sequential increase on a quarter that itself grew 15.23% sequentially. Second, the year-over-year comparison is against the trough — Q4 FY2025 was a $6,800.0M quarter with a 25.18% operating margin, the low point of the last nine quarters in both revenue and margin. A 51.47% growth print will look spectacular on the headline and tell the reader almost nothing about the slope from here. The sequential line is the one that carries information.

For the fiscal year ahead the Street (24 analysts) models $46.86B of revenue and EPS of 18.77 for FY2027, a range of $43.56B to $49.60B — so Thursday's quarter is roughly the run-rate those FY2027 numbers already assume. Consensus figures are FMP analyst estimates as pulled on November 9, 2026.

### The record — eight prints, eight beats, and a stock that stopped caring

![Applied Materials: eight quarters of EPS and revenue surprises against the next-session reaction. Source: FMP /stable/earnings, historical earnings calendar and daily closes.](https://www.altamiraequity.com/content/images/2026/11/AMAT-2026-11-08-surprise_history.png)

Applied Materials: eight quarters of EPS and revenue surprises against the next-session reaction. Source: FMP /stable/earnings, historical earnings calendar and daily closes.

| Print      | EPS actual / estimate | EPS surprise | Revenue actual / estimate | Revenue surprise | Grade | Next-session move |
| ---------- | --------------------- | ------------ | ------------------------- | ---------------- | ----- | ----------------- |
| 2026-08-13 | 3.50 / 3.40           | +2.94%       | $9,115.0M / $8,995.0M     | +1.33%           | B     | −5.12%            |
| 2026-05-14 | 2.86 / 2.68           | +6.72%       | $7,910.0M / $7,683.3M     | +2.95%           | A     | −0.89%            |
| 2026-02-12 | 2.38 / 2.21           | +7.69%       | $7,012.0M / $6,870.1M     | +2.06%           | A     | +8.08%            |
| 2025-12-12 | 2.17 / 2.11           | +2.84%       | $6,800.0M / $6,683.6M     | +1.74%           | B     | +0.79%            |
| 2025-08-14 | 2.48 / 2.36           | +5.08%       | $7,302.0M / $7,222.0M     | +1.11%           | B     | −14.07%           |
| 2025-05-15 | 2.39 / 2.31           | +3.46%       | $7,100.0M / $7,128.6M     | −0.40%           | B     | n/a               |
| 2025-02-13 | 2.38 / 2.28           | +4.39%       | $7,166.0M / $7,147.8M     | +0.25%           | B     | n/a               |
| 2024-11-14 | 2.32 / 2.19           | +5.94%       | $7,045.0M / $6,963.8M     | +1.17%           | B     | n/a               |

The pattern is unusually clean: eight beats, zero misses, zero mixed quarters, and an average EPS surprise of +4.88%. The reactions are the opposite of clean. The average absolute next-session move over the prints with price data is 5.79%, the largest −14.07% on a beat in August 2025, and the last beat was sold 5.12%. Three of the five reactions on file were negative on positive surprises. In other words the surprise has not been the variable the market trades; the slope of the next quarter has. That is why the sequential bar, not the headline, is the number to hold the print against.

### What the print has to prove

Four lines, each with the number that would satisfy it. These are the cells we will read first.

1. **Gross margin holds above 50% at the larger scale.** Q3 FY2026 printed a 50.31% gross margin, up 153 bp year over year and 41 bp sequentially, on $9,115.0M of revenue. A $10.30B quarter at or above 50.31% says mix is still improving with volume; a quarter below it says the incremental revenue is coming in at lower-margin product or pricing.
2. **Operating margin at or above 33.74%.** Operating income was $3,075.0M last quarter, 33.74% of revenue, up 315 bp year over year and 184 bp sequentially, with operating expenses held to 16.58% of revenue (R&D $1,100.0M, SG&A $411.0M). The five-year record is a 29.22% operating margin in FY2025 and 384 bp of expansion since FY2020; 33.74% was the high. The print has to show that figure was a level, not a spike.
3. **Free cash flow converts again.** The cash line is the honest weak spot in the recent record. Free cash flow was $2,330.0M last quarter — 25.56% of revenue and 91.80% of net income — but the quarter before it was $210.0M, a 2.65% margin, and the quarter before that $1,040.0M. Inventory stood at $6,564.0M at quarter end. Two of the last three quarters converted poorly; a third strong conversion quarter is what turns the FY2025 free-cash-flow margin of 20.09% back toward the 27.55% of FY2024.
4. **The share count keeps falling.** Diluted shares were 800,000,000 last quarter, down 1.36% year over year and 12.46% over five fiscal years, with $440.0M of buybacks and $420.0M of dividends paid in the quarter. Diluted EPS grew 43.44% year over year against net income growth of 42.66% — almost none of the EPS growth is financial engineering, and the print needs to keep it that way.

Guidance for the January quarter will be the fifth line, and it is the one this preview cannot pre-judge: the company's outlook is not in the dataset until the call transcript posts. We will grade it when it exists, against the $46.86B FY2027 consensus.

### The honest counterweight

Three cells argue that a clean print may not be enough, and all three are in the data.

- **The scorecard's fair-value cells disagree with each other by a factor of three.** The November 7 edition lists Morningstar's fair value at 520.00 (as of August 3), the in-house DCF at 175.53, FMP's DCF at 151.21 and the analyst target at 659.83 — and declines to pick one. A share price of 332.72 sits inside that range. Fair value is stated as published in the dataset; the disagreement is the point, not any single number.
- **Trend state is DRIFTING with a technical score of 17.9.** However the quarter prints, the scorecard's technical half will not repair in one session: the shares are 25.29% below the 200-day average. The fundamentals cleared the quality gate long ago (quality 82.3, health 93.1); the market has been voting on something the filings do not measure.
- **The growth pillar is the weakest fundamental cell at 37.7.** Five-year revenue growth compounded at 10.52% and EPS at 17.18% — strong, but the scorecard ranks growth against the universe, and the AI-equipment peer set grew faster. A 51.47% year-over-year quarter would lift that cell; a sequential stall would confirm it.

### What we will grade on Friday morning

The recap, due before the open on Friday, November 13, will grade the print on the uniform scale (A: both lines beat by 2% or more; B: both beat; C: mixed; D: one clear miss; F: both miss or any miss of 3% or more), then read the four lines above in that order — gross margin, operating margin, cash conversion, share count — and the January guidance against the FY2027 consensus. The reaction will be measured close to close, against the 5.79% average absolute move. The thesis verdict (Strengthened, Intact, Strained, Broken) will follow the margin cells, not the headline.

## In charts

The numbers behind this preview, drawn from the same filed figures.

![Applied Materials, Inc.: quarterly revenue and year-on-year growth. Source: FMP income statements.](https://www.altamiraequity.com/content/images/2026/11/AMAT-2026-11-08-revenue_trend.png)

Applied Materials, Inc.: quarterly revenue and year-on-year growth. Source: FMP income statements.

![Applied Materials, Inc.: the long view — annual revenue, margins and returns on capital. Source: FMP annual statements.](https://www.altamiraequity.com/content/images/2026/11/AMAT-2026-11-08-long_view.png)

Applied Materials, Inc.: the long view — annual revenue, margins and returns on capital. Source: FMP annual statements.

![Applied Materials, Inc.: how the latest quarter's revenue became operating income and free cash flow. Source: FMP income and cash-flow statements.](https://www.altamiraequity.com/content/images/2026/11/AMAT-2026-11-08-income_flow.png)

Applied Materials, Inc.: how the latest quarter's revenue became operating income and free cash flow. Source: FMP income and cash-flow statements.

### Sources

- FMP /stable/earnings (consensus and the eight-quarter actuals), /historical/earning\_calendar/AMAT (report timing), /historical-price-full/AMAT (daily closes; moving averages and ranges computed from them) — pulled November 9, 2026.
- FMP /income-statement, /cash-flow-statement, /balance-sheet-statement (quarterly, nine quarters) and the annual statements plus /key-metrics for FY2020–FY2025 — pulled November 9, 2026.
- FMP /analyst-estimates (FY2027 consensus, 24 analysts) and /key-metrics-ttm (trailing multiples) — pulled November 9, 2026.
- Altamira KPI Scorecard, edition 2026-11-07 (kpi-scorecard-2026-11-07.json): composite, pillar and technical scores, tier, trend state, verdict, and fair-value sources as published.
- Guidance and management commentary: NOT STATED — the earnings-call transcript does not exist until Thursday.

Research for information only — not investment advice; see Disclosures.