1Q26 Preview: We're Buyers, Positive Fundamentals

Research evidence excerpt

1Q26 Preview: We're Buyers, Positive Fundamentals

Technology | Semiconductors and Semiconductor Equipment

May 12, 2026

Applied Materials, Inc. Mark Lipacis Vedvati Shrotre, CFA 214-459-4007 415-800-0187

AMAT | $443.62 Mark.Lipacis@evercoreisi.com Vedvati.Shrotre@evercoreisi.com

Outperform | Target Price/Base Case: $480.00

Earnings Preview

Company Statistics 1Q26 Preview: We're Buyers, Positive

52-Week Range $153.47 - $448.45

Market Capitalization (B) $352 Fundamentals

Enterprise Value (B) $351 We like the AMAT setup into the print, and believe there is good

Dividend Yield 0.5% potential for a Beat/Raise AprQ report as: 1) Agentic AI is DRAM and

Net Cash/Share $(1.66) NAND intensive (see note) and AMAT is well-positioned to benefit from

Shares Outstanding (M) 794 acceleration in NAND spend with ~37% exposure; 2) Street models

2026 semi system revs to grow 19%YY – which we view as

conservative; and 3) AMAT trades at 34x NTM EPS, the lowest P/E our

Earnings Summary SCE coverage, and a 19%/14%/14% discount to large-cap SCE peers

2025 2026E 2027E ASML/LRCX and KLAC – we view AMAT’s risk/reward ratio as positive.

Revenue (M) Q1 $7,100 $7,650 $10,088 Fundamentals Are Positive. Expect a Beat & Raise

Q2 $7,302 $8,057 $10,503

Q3 $6,800 $8,735 $10,386 ◼ Street models AMATs 2026 semi systems revs to grow 19%

Q4 $7,012 $9,664 $9,939

CY $28,214 $34,106 $40,916 (900bps slower vs. our base case 2026 WFE growth of 10%) –

Cons Revenue (M) Q1 $7,100 $7,683 $9,573 which we think could be conservative as – in 2016, 2020 and 2024

Q2 $7,302 $8,139 $9,950 AMAT’s system revs grew 14%/16% and 9% faster than WFE

Q3 $6,800 $8,686 $10,226

Q4 $7,012 $9,138 $10,574 ◼ Strength in Memory Spend. Agentic AI is DRAM and NAND