Applied Materials Achieves Record $7.91 Billion Revenue in Q2 2026, Advanced Packaging Business to Accelerate Over 50% for AI

MLQ.ai USA

Overview

Applied Materials reported record revenue of $7.91 billion in Q2 2026, marking a 13% sequential and 11% year-over-year increase, with non-GAAP gross margin reaching 50%, an 80 basis point improvement. The company anticipates its advanced packaging sales, driven by AI computing advancements, to accelerate over 50% in 2026 and continue strong growth beyond 2027. Applied Materials is also partnering with Broadcom to develop advanced chip packaging technologies for AI systems.

In Depth

Key Findings

Applied Materials reported a record revenue of $7.91 billion in the second quarter of 2026, showcasing robust growth in the semiconductor equipment market and strong momentum in the AI computing sector. This revenue represents a 13% increase quarter-over-quarter and an 11% increase year-over-year. The company’s non-GAAP gross margin also reached 50%, an 80 basis point improvement from the previous year. Applied Materials forecasts that the advancement of AI computing will propel advanced packaging demand, with sales accelerating over 50% in 2026 and sustaining strong growth beyond 2027.

Technical Details

AI systems, characterized by highly integrated packages with multiple components, necessitate sophisticated packaging technologies such as 3D stacking and chiplet integration. Applied Materials is expanding its portfolio for scaling AI-driven chip packaging, notably by acquiring ASMPT’s NEXX business to strengthen its position in panel-level advanced semiconductor packaging equipment. The company has also partnered with Broadcom to focus on developing advanced chip packaging technologies specifically for AI systems. This collaboration aims to enhance interconnect density and bandwidth in semiconductor systems, which is critical for pushing the performance boundaries of AI infrastructure.

Background and Context

The semiconductor industry is experiencing a surge in investments in advanced packaging technologies due to the explosive growth in AI chip demand. AI semiconductors require higher performance, lower power consumption, and smaller form factors, which cannot be achieved solely through traditional 2D scaling. As a leading player in the wafer manufacturing equipment market, Applied Materials anticipates significant growth in wafer manufacturing equipment for AI logic and memory fabs in 2026 and 2027, which has led its stock price to hit an all-time high of $485.96. The company is recognized as a vital entity in the AI ecosystem, poised to benefit regardless of which specific chips dominate the AI market.

Strategic Significance and Outlook

The rapid growth of Applied Materials’ advanced packaging business and its strategic partnerships clearly demonstrate its pivotal role in AI-era semiconductor manufacturing. The collaboration with Broadcom will accelerate the development of next-generation packaging solutions for AI systems, establishing new benchmarks for interconnect density and bandwidth. The company’s continuous investments and technological innovations are indispensable for supporting the performance improvement and widespread adoption of AI chips, while enhancing the overall efficiency and scalability of the semiconductor supply chain.