Applied Materials reported record fiscal fourth-quarter revenue of $10.41 billion on Thursday, up 53% from a year earlier, beating Wall Street expectations as demand for chips tied to artificial intelligence accelerated.

Analysts had forecast revenue of $10.30 billion and adjusted earnings of $4.06 a share, according to The Wall Street Journal. Applied delivered non-GAAP earnings per share of $4.16, a record, up 92% from a year earlier. GAAP net income reached $2.72 billion, or $3.40 a share, up 43%.

The company, which makes the equipment that fabricates semiconductors, guided fiscal first-quarter revenue to $11.1 billion, plus or minus $500 million, with non-GAAP diluted earnings per share of $4.35, plus or minus 20 cents. Analysts had expected $10.85 billion in revenue and $4.24 a share for that period, again per the Journal — meaning the forecast sits above consensus on both lines.

What drove the quarter?

The semiconductor equipment business did the heavy lifting. Semiconductor Systems revenue rose to $7.996 billion from $4.879 billion a year earlier — an increase of roughly 64%, or about $3.1 billion in a single quarter.

The segment's mix breaks down as follows:

• Foundry and logic: 58% of segment revenue
• DRAM memory: 33%
• Flash memory: 9%

Applied Global Services, the parts-and-services arm, generated $1.896 billion in revenue, up from $1.506 billion a year earlier.

Margins widened alongside volumes. GAAP gross margin was 50.4% and non-GAAP gross margin 50.6%, up 240 and 250 basis points respectively from the prior year.

What did management say about AI?

"AI continues to fuel strong incremental demand for semiconductors," President and CEO Gary Dickerson said in a statement.

Dickerson said Applied expects its Semiconductor Systems business to expand by more than 40% in calendar 2026 — a period the company defines as running from the second quarter of fiscal 2026 through the first quarter of fiscal 2027. That projection puts a hard number on the durability of the AI investment cycle from the vantage point of a supplier that sells to nearly every major chipmaker.

How strong was the full year?

For the fiscal year ended Oct. 25, revenue was a record $34.45 billion, up 21%. Non-GAAP earnings per share were a record $12.89, up 37%. Growth for the full year ran at roughly half the pace of the fourth quarter's, a gap that shows how sharply spending on chipmaking equipment accelerated through the year.

What happened to the cash?

Cash from operations hit a record $3.30 billion in the quarter. Applied returned $2.42 billion to shareholders, split between $2.00 billion in share repurchases and $421 million in dividends.

Chief Financial Officer Brice Hill said the buyback was the largest quarterly repurchase in more than eight years. The repurchase alone equals roughly 61% of the quarter's operating cash flow.

Applied scheduled an earnings call for 4:30 p.m. ET on Thursday to discuss the results and guidance.

The quarter sets a high bar: guidance for the next three months implies another record, and management has committed publicly to a growth number for calendar 2026.