Applied Materials (AMAT): Can Earnings Extend a 24% Rebound?

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Bitget2026/11/12 08:09

By:Bitget

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A Sharp Recovery Ahead of Earnings

Applied Materials (AMAT) has staged a striking reversal. The stock fell 13.58% on November 5, closing at $319.25 after touching an intraday low of $316.95. Four trading sessions later, it closed at $395.08 on November 11, up 6.05% for the day and 23.75% from the November 5 close. Shares briefly reached $404.71 before retreating, leaving the $405 area as an immediate technical hurdle.

The rebound coincides with renewed interest in semiconductor equipment and positioning ahead of quarterly results. Investors are weighing strong AI-related spending against concerns about expensive technology valuations and the durability of capital expenditure. AMAT's rapid recovery has raised the bar for its upcoming earnings report.

AI Demand Supports Fundamentals

AMAT supplies critical equipment for deposition, etching, process control and advanced packaging. As chip architectures grow more complex, manufacturers need additional materials engineering steps. Investment in advanced logic chips, high-bandwidth memory (HBM) and packaging infrastructure creates multiple sources of equipment demand.

In fiscal third-quarter 2026, AMAT reported revenue of $9.12 billion, up 25% year over year. Non-GAAP earnings per share rose 41% to $3.50, while operating cash flow reached $3.04 billion. Semiconductor Systems revenue increased 27% to $7.04 billion, supported in part by demand for DRAM equipment. Higher margins also suggest that an improving product mix is supporting profitability.

The main vulnerabilities are tighter U.S. export restrictions on equipment shipped to China and the cyclical nature of chipmakers' spending. Slower AI infrastructure expansion or weaker Chinese demand could pressure future orders.

Earnings Expectations Are Elevated

AMAT is scheduled to report fiscal fourth-quarter 2026 results after the U.S. market closes on November 12. Analysts expect roughly $10.3 billion in revenue, representing approximately 51% annual growth, and non-GAAP EPS of $4.06, up about 87%. Both estimates are slightly above management's previous guidance midpoints of $10.25 billion and $4.02, respectively.

Investors will focus on guidance for fiscal 2027, where consensus expectations stand near $46.86 billion in revenue and $18.77 in EPS. Comments on advanced logic, DRAM and packaging orders, gross margins and the Chinese market will be critical. With shares already up almost 24% in four sessions, disappointing guidance could trigger profit-taking even after a solid quarterly result. Management's specific commentary on customer investment plans will therefore be especially important.

Technical Outlook: Watch $405

The November 11 intraday peak of $404.71 places resistance at $404–405. A high-volume breakout that holds above $405 could shift attention toward $420–430. The quality of the follow-through will matter more than the size of any immediate earnings-related gap.

Initial support stands at $381–383, near the November 11 session low. A stronger support area sits at $370–373, around recent closing levels. Stabilization after a pullback toward $381–383 would preserve the short-term recovery. A sustained break below $370 would weaken the rebound structure and increase the likelihood of a deeper correction.

Disclaimer: The content of this article solely reflects the author's opinion and does not represent the platform in any capacity. This article is not intended to serve as a reference for making investment decisions.

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