The AI trade keeps finding new winners further down the stack. On Thursday evening, it was the turn of the company that sells the machines that make the chips: Applied Materials reported record quarterly revenue of $10.41 billion, up 53% year over year, with adjusted earnings per share of $4.16 — up 92% and ahead of the $4.06 analysts expected. Fiscal 2026 revenue reached a record $34.45 billion, up 21%.

The growth is concentrated exactly where the AI buildout is. Semiconductor Systems, the division selling wafer fab equipment to chipmakers, took in $7.996 billion in the quarter, up 64% from a year earlier. And the mix tells its own story: DRAM jumped to 33% of segment revenue, up from 28% a year ago, as memory makers race to add capacity — the same crunch that has SK Hynix talking about shortages running to 2030. Foundry and logic still dominate at 58%, but memory is the fastest-growing checkbook in the fab.

Chief executive Gary Dickerson framed it as a multi-year story, not a spike. "Applied Materials delivered record results in fiscal 2026, and we are on track to grow our Semiconductor Systems business more than 40 percent in our calendar 2026," he said. "AI continues to fuel strong incremental demand for semiconductors and Applied has built the most-enabling portfolio to advance the AI-computing roadmap, putting us in a great position for multi-year revenue and profit growth."

The guidance backs him up: first-quarter revenue of about $11.1 billion and adjusted earnings of $4.35 per share, both above Wall Street's estimates. Record quarterly free cash flow of $2.6 billion funded $2.42 billion returned to shareholders, including the largest buyback in more than eight years.

The market, so far, is unimpressed: shares closed down 3.6% in the regular session and barely moved after hours, despite the beat and the raise. That is this earnings season in miniature — record numbers from the suppliers, skepticism from the buyers.

It is the second record from the AI plumbing in a single evening. Cisco reported its best growth in 15 years hours earlier, calling it the start of a networking supercycle. Applied Materials is the other half of that sentence: the pipes are being bought, and so are the machines that make the chips that fill them. Nvidia reports on Tuesday, and it gets the next word.

— via Applied Materials