A Machine for Almost Every StepWide moat

Applied Materials (AMAT) — moat facet

Applied sells the machines for almost every step of chipmaking except lithography, which gives it a seat at nearly every change in how chips are built.

Applied's advantage is breadth. Its Semiconductor Systems segment sells "semiconductor capital equipment to enable materials engineering steps including etch, rapid thermal processing, deposition, chemical mechanical planarization, metrology and inspection, wafer packaging, and ion implantation"1. Lithography is not on the list; ASML, which TechInsights ranks first in the industry2, sells that step.

Semiconductor Systems revenue ($M)11,367FY202016,286FY202118,797FY202219,698FY202319,911FY202420,798FY2025Applied Materials Forms 10-K FY2022 and FY2025
Up 83% in five years.

The business is large and profitable. Semiconductor Systems revenue was $20,798 million in fiscal 2025, about 73% of the company34, and it earned 35.5% of that as operating income5. It grew at about 12.8% a year from fiscal 20206.

Breadth matters because chipmaking is a sequence. A new transistor or a new way of stacking memory adds several steps that must work together, and a supplier that can deliver a qualified sequence saves its customer engineering time. Applied calls itself a "materials engineering" company7 for this reason: its tools change what a wafer is made of, layer by layer.

The breadth does not make Applied the leader in every step. Lam Research, Tokyo Electron and KLA, which rank beside it in the industry's top five8, each compete with it in some of these steps. What the breadth provides is a seat at almost every transition, rather than a monopoly on any one.

The customers are few and the demand is cyclical, which the dangers under this aspect cover. But the segment's margin and its research budget, $3,042 million of the company's $3,570 million in fiscal 20259, have both grown through the last cycle.

The company's own finance chief puts the claim plainly. Speaking in May 2026 he described Applied "As the largest process equipment company in the fastest growing markets"10. It is a claim about process equipment, which excludes lithography, and it is Applied's own. What supports it in the filings is the list of steps the segment serves and a segment margin that has stayed above a third of revenue for three years11.

The recast first quarter of fiscal 2026 shows the breadth under strain. Systems revenue fell to $5,141 million from $5,597 million, and operating income to $1,427 million from $1,872 million12, as Chinese customers were restricted and the settlement charge landed. By the third quarter revenue was up 26.5% on a year earlier13. Breadth did not prevent a bad quarter; it shortened it.

The breadth is also expensive to keep. Semiconductor Systems carried $3,042 million of research in fiscal 202514, about 15% of its own revenue15. A rival that sells into three steps can match Applied's spending in those three with a much smaller budget; what it cannot match is the combination.

This is the core of the moat, and it is a wide one. The number that would change the verdict is the segment margin through the next downturn: if Semiconductor Systems still earns above 25% when revenue falls, the breadth is doing its job.

Moat trajectory: Widening

Segment revenue grew 12.8% a year FY2020-FY2025; margin rising.

The number that tests this moat
Reported
Semiconductor Systems revenue, latest quarter
$7,040M, +26.5% year on year (Q3 FY2026)

The machine business; growth falling behind the chipmakers' capital spending would mean lost steps.

Source: Applied Materials Q3 FY2026 results release ↗
Aspects of the moat
DIG DEEPER 01
Thirty-Five Cents on the Systems Dollar
Applied keeps about 35 cents of every dollar of machines it sells, and the share has risen three years running.
DIG DEEPER 02
Foundry and Logic Buy Two Machines in Three
Two of every three machines Applied sells go into logic chips, where each new transistor design creates steps with no installed rival.
DIG DEEPER 03
DRAM: From 17% to 26% of the Machines
Stacked memory for AI chips has made DRAM makers a quarter of Applied's machine sales, up from a sixth.
DIG DEEPER 04
Thirteen Quarters of Wider Gross Margins
Applied has widened its gross margin for thirteen quarters in a row, from 46.7% to 50.3%.
⚠ Threats to the moat
⚠ THREAT 01
China Builds Its Own Tools
China's government is funding domestic toolmakers in the market that gave Applied 37% of its revenue in 2024.
⚠ THREAT 02
The Down Year Always Comes
Applied's revenue fell 12.6% in 2019, and three-quarters of it still comes from machines customers can stop buying.
References
  1. ReportedIts Semiconductor Systems segment sells "semiconductor capital equipment to enable materials engineering steps including etch, rapid thermal processing, deposition, chemical mechanical planarization, metrology and inspection, wafer packaging, and ion implantation".
    Applied Materials Form 10-K for fiscal 2025 (year ended 26 October 2025) - segment note: revenue, operating income, gross margin, research, capital spending and goodwill. — FY2025 · publ. 12 December 2025 · source ↗
  2. ReportedLithography is not on the list; ASML, which TechInsights ranks first in the industry, sells that step.
    TechInsights, top IC manufacturing equipment suppliers 2025 - ASML led with $27.5 billion of revenue; Applied Materials, Lam Research, Tokyo Electron and KLA completed the top five, unchanged from 2024. — 2025 · publ. 2026 · source ↗
  3. ReportedSemiconductor Systems revenue was $20,798 million in fiscal 2025, about 73% of the company, and it earned 35.5% of that as operating income.
    Applied Materials Form 10-K for fiscal 2025 (year ended 26 October 2025) - segment note: revenue, operating income, gross margin, research, capital spending and goodwill. — FY2025 · publ. 12 December 2025 · source ↗
  4. Moat Explorer calcSemiconductor Systems revenue was $20,798 million in fiscal 2025, about 73% of the company, and it earned 35.5% of that as operating income.
    Moat Explorer calculation from Applied Materials' reported figures ($ millions unless stated). Segment shares FY2025: Semiconductor Systems 20,798 / 28,368 = 73.3%; Applied Global Services 6,385 / 28,368 = 22.5%; Corporate and Other 1,185 / 28,368 = 4.2%. Segment operating margins FY2025: 7,379 / 20,798 = 35.5%; 1,792 / 6,385 = 28.1%; FY2024 6,981 / 19,911 = 35.1%, 1,812 / 6,225 = 29.1%; FY2023 6,879 / 19,698 = 34.9%, 1,529 / 5,732 = 26.7%. Q3 FY2026 margins: Semiconductor Systems 2,657 / 7,040 = 37.7%; Applied Global Services 536 / 1,781 = 30.1%; company operating margin 3,075 / 9,115 = 33.7%. Q1 FY2026 Semiconductor Systems 1,427 / 5,141 = 27.8%. Nine months FY2026 6,176 / 18,146 = 34.0% and 1,461 / 5,005 = 29.2%. Growth Q3 FY2026: Semiconductor Systems 7,040 / 5,564 - 1 = 26.5% year on year and 7,040 / 5,965 - 1 = 18.0% on the quarter; Applied Global Services 1,781 / 1,463 - 1 = 21.7%; revenue 9,115 / 7,910 - 1 = 15.2% on the quarter; United States revenue 1,367 / 683 - 1 = 100%; Europe 483 / 160 = 3.0 times. Nine months: 18,146 / 16,562 - 1 = 9.6%; 5,005 / 4,236 - 1 = 18.2%. Segment history, revenue: Semiconductor Systems 11,367 (FY2020), 16,286, 18,797, 19,698, 19,911, 20,798 (FY2025), compound growth (20,798 / 11,367)^(1/5) - 1 = 12.8% a year; Applied Global Services 4,155, 5,013, 5,543, 5,732, 6,225, 6,385, compound growth (6,385 / 4,155)^(1/5) - 1 = 9.0% a year, 6,385 / 5,732 - 1 = 11.4% over two years; Corporate and Other including Display 1,607 + 73 = 1,680 (FY2020), 1,634 + 130 = 1,764 (FY2021), 1,331 + 114 = 1,445 (FY2022), 868 + 219 = 1,087, 885 + 155 = 1,040, 1,185 (FY2025); 1,185 / 1,680 - 1 = -29%. Display operating margin 235 / 1,060 = 22% (FY2025) and 51 / 885 = 6% (FY2024). DRAM equipment 26% x 20,798 = about 5,400; flash 7% x 20,798 = about 1,460. Company margins: gross 13,808 / 28,368 = 48.7% (FY2025), 12,897 / 27,176 = 47.5% (FY2024), 12,384 / 26,517 = 46.7% (FY2023); operating 8,289 / 28,368 = 29.2%. R&D 3,570 / 28,368 = 12.6%; 3,570 / 1,451 = 2.5 times (FY2015-FY2025). Effective tax 2,273 / 9,271 = 24.5% (FY2025) and 975 / 8,152 = 12.0% (FY2024). Revenue FY2019 14,608 / 16,705 - 1 = -12.6%. Diluted shares 808 / 1,226 - 1 = -34%. Revenue outside the United States 25,305 / 28,368 = 89%. China share of revenue: 5,456 / 17,202 = 31.7% (FY2020); 7,535 / 23,063 = 32.7%; 7,254 / 25,785 = 28.1%; 7,247 / 26,517 = 27.3%; 10,117 / 27,176 = 37.2% (FY2024); 8,529 / 28,368 = 30.1% (FY2025). Taiwan 6,857 / 4,010 - 1 = 71%. Two largest customers 19% + 15% = 34% (FY2025) and 20% + 14% = 34% (nine months FY2026). Backlog: 15,002 / 19,011 - 1 = -21% (October 2022 to October 2025); Semiconductor Systems 7,105 / 12,691 - 1 = -44%; Applied Global Services 7,141 / 5,643 - 1 = +27%; shares of backlog 7,141 / 15,002 = 48% and 7,105 / 15,002 = 47%. Contract liabilities 3,271 / 2,566 - 1 = +27%; receivables 7,691 / 5,185 - 1 = +48%. Cash: net cash 7,241 + 1,332 - 100 - 6,455 = 2,018 (October 2025); 8,022 + 1,449 - 799 - 5,460 = 3,212 (October 2024); 7,037 + 2,196 - 1,299 - 5,245 = 2,689 (July 2026). Payout 1,384 / 6,998 = 19.8%; dividends plus buybacks 1,384 + 4,893 = 6,277, 6,277 / 7,958 = 79% of operating cash flow. ROE 6,998 / ((20,415 + 19,001) / 2) = 35.5% (FY2025), 40.6% (FY2024), 48.0% (FY2023). Trailing twelve months to July 2026: revenue 6,800 + 24,037 = 30,837; net income 1,897 + 7,370 = 9,267; operating cash flow 2,828 + 5,568 = 8,396; capital expenditure 785 + 1,988 = 2,773. Implied FY2026 revenue at the guidance midpoint 24,037 + 10,250 = 34,287, 34,287 / 28,368 - 1 = 20.9%; fourth-quarter midpoint 10,250 / 6,800 - 1 = 50.7%; implied non-GAAP EPS 8.73 + 4.02 = 12.75. Market: 376,360 / 9,267 = 40.6 times trailing earnings; 376,360 / 30,837 = 12.2 times sales; price 474.25 / 723.00 - 1 = -34.4%; Lam Research 384.36 - 376.36 = 8.00 bn more market value. ASML 662.45 / 376.36 = 1.8 times; KLA 246.05 / 376.36 = 0.65. Calendar year-end 2025 P/E 203,780 / 6,998 = 29.1; fiscal year-end P/E 40.91 / 11.83 = 3.5 times the FY2022 low. Other: services growth FY2025 6,385 / 6,225 - 1 = 2.6%; company revenue 28,368 / 27,176 - 1 = 4.4%; dividends 1,384 / 7,958 = 17.4% of operating cash flow; two largest customers FY2024 12% + 11% = 23%; Korea 1,521 / 1,160 - 1 = 31%; Semiconductor Systems 20,798 / 11,367 = 1.83 times (FY2020-FY2025); Display 1,060 / 1,607 - 1 = -34%; net income 6,998 / 1,377 = 5.1 times and EPS 8.66 / 1.12 = 7.7 times (FY2015-FY2025); revenue 28,368 / 9,659 = 2.9 times; balance sheet build July 2026 6,564 + 7,691 + 5,606 = 19,861; Display revenue excluded from Corporate and Other FY2025 1,185 - 1,060 = 125. Revenue FY2024 27,176 / 26,517 - 1 = 2.5%; R&D Q4 917 / 858 - 1 = 6.9%; revenue 30,837 / 25,785 - 1 = 19.6% (FY2022 to trailing July 2026); strategic investment gains 755 + 949 = 1,704; China less Taiwan nine months 6,688 - 5,902 = 786; forward earnings implied 40.91 / 26.95 = 1.52 times trailing; Q4 guide 10,250 / 9,115 - 1 = 12.5% above Q3. Memory share of systems revenue: DRAM plus flash 19% + 21% = 40% (FY2021), 17% + 6% = 23% (FY2023), 26% + 7% = 33% (FY2025). Market value 376,360 / 182,232 = 2.07 times the FY2025 year-end value; trailing net income 9,267 / 6,998 - 1 = 32%. Operating income 8,289 / 1,693 = 4.9 times (FY2015-FY2025). P/E gap to Lam 57.7 - 40.9 = 16.8. Q3 FY2026 returns 860 / 3,037 = 28% of operating cash flow. China plus Taiwan nine months (6,688 + 5,902) / 24,037 = 52%. Systems revenue Q1 to Q3 FY2026 7,040 / 5,141 - 1 = 37%. Systems share of segment operating income FY2025 7,379 / (7,379 + 1,792) = 7,379 / 9,171 = 80%. Systems R&D 3,042 / 20,798 = 14.6%. Third quarter share of nine-month systems profit 2,657 / 6,176 = 43%. Services FY2024 6,225 / 5,732 - 1 = 8.6%. Services share of backlog 4,335 / 11,758 = 37% (October 2021). Research per diluted share 1,451 / 1,226 = 1.18 (FY2015) and 3,570 / 808 = 4.42 (FY2025). Net cash plus long-term investments 2,689 + 5,268 = 7,957. Dividends per share 1.78 / 1.22 - 1 = 46%. ROE 35.5% / 10% = 3.5 times - segment shares, margins and growth - segment and company margins, research and tax. — FY2015-FY2026 · publ. September 2026 · source ↗
    Method: Arithmetic on figures reported in Applied Materials' Forms 10-K and 10-Q, results releases and market data; operands shown in the source line.
  5. Moat Explorer calcSemiconductor Systems revenue was $20,798 million in fiscal 2025, about 73% of the company, and it earned 35.5% of that as operating income.
    Moat Explorer calculation from Applied Materials' reported figures ($ millions unless stated). Segment shares FY2025: Semiconductor Systems 20,798 / 28,368 = 73.3%; Applied Global Services 6,385 / 28,368 = 22.5%; Corporate and Other 1,185 / 28,368 = 4.2%. Segment operating margins FY2025: 7,379 / 20,798 = 35.5%; 1,792 / 6,385 = 28.1%; FY2024 6,981 / 19,911 = 35.1%, 1,812 / 6,225 = 29.1%; FY2023 6,879 / 19,698 = 34.9%, 1,529 / 5,732 = 26.7%. Q3 FY2026 margins: Semiconductor Systems 2,657 / 7,040 = 37.7%; Applied Global Services 536 / 1,781 = 30.1%; company operating margin 3,075 / 9,115 = 33.7%. Q1 FY2026 Semiconductor Systems 1,427 / 5,141 = 27.8%. Nine months FY2026 6,176 / 18,146 = 34.0% and 1,461 / 5,005 = 29.2%. Growth Q3 FY2026: Semiconductor Systems 7,040 / 5,564 - 1 = 26.5% year on year and 7,040 / 5,965 - 1 = 18.0% on the quarter; Applied Global Services 1,781 / 1,463 - 1 = 21.7%; revenue 9,115 / 7,910 - 1 = 15.2% on the quarter; United States revenue 1,367 / 683 - 1 = 100%; Europe 483 / 160 = 3.0 times. Nine months: 18,146 / 16,562 - 1 = 9.6%; 5,005 / 4,236 - 1 = 18.2%. Segment history, revenue: Semiconductor Systems 11,367 (FY2020), 16,286, 18,797, 19,698, 19,911, 20,798 (FY2025), compound growth (20,798 / 11,367)^(1/5) - 1 = 12.8% a year; Applied Global Services 4,155, 5,013, 5,543, 5,732, 6,225, 6,385, compound growth (6,385 / 4,155)^(1/5) - 1 = 9.0% a year, 6,385 / 5,732 - 1 = 11.4% over two years; Corporate and Other including Display 1,607 + 73 = 1,680 (FY2020), 1,634 + 130 = 1,764 (FY2021), 1,331 + 114 = 1,445 (FY2022), 868 + 219 = 1,087, 885 + 155 = 1,040, 1,185 (FY2025); 1,185 / 1,680 - 1 = -29%. Display operating margin 235 / 1,060 = 22% (FY2025) and 51 / 885 = 6% (FY2024). DRAM equipment 26% x 20,798 = about 5,400; flash 7% x 20,798 = about 1,460. Company margins: gross 13,808 / 28,368 = 48.7% (FY2025), 12,897 / 27,176 = 47.5% (FY2024), 12,384 / 26,517 = 46.7% (FY2023); operating 8,289 / 28,368 = 29.2%. R&D 3,570 / 28,368 = 12.6%; 3,570 / 1,451 = 2.5 times (FY2015-FY2025). Effective tax 2,273 / 9,271 = 24.5% (FY2025) and 975 / 8,152 = 12.0% (FY2024). Revenue FY2019 14,608 / 16,705 - 1 = -12.6%. Diluted shares 808 / 1,226 - 1 = -34%. Revenue outside the United States 25,305 / 28,368 = 89%. China share of revenue: 5,456 / 17,202 = 31.7% (FY2020); 7,535 / 23,063 = 32.7%; 7,254 / 25,785 = 28.1%; 7,247 / 26,517 = 27.3%; 10,117 / 27,176 = 37.2% (FY2024); 8,529 / 28,368 = 30.1% (FY2025). Taiwan 6,857 / 4,010 - 1 = 71%. Two largest customers 19% + 15% = 34% (FY2025) and 20% + 14% = 34% (nine months FY2026). Backlog: 15,002 / 19,011 - 1 = -21% (October 2022 to October 2025); Semiconductor Systems 7,105 / 12,691 - 1 = -44%; Applied Global Services 7,141 / 5,643 - 1 = +27%; shares of backlog 7,141 / 15,002 = 48% and 7,105 / 15,002 = 47%. Contract liabilities 3,271 / 2,566 - 1 = +27%; receivables 7,691 / 5,185 - 1 = +48%. Cash: net cash 7,241 + 1,332 - 100 - 6,455 = 2,018 (October 2025); 8,022 + 1,449 - 799 - 5,460 = 3,212 (October 2024); 7,037 + 2,196 - 1,299 - 5,245 = 2,689 (July 2026). Payout 1,384 / 6,998 = 19.8%; dividends plus buybacks 1,384 + 4,893 = 6,277, 6,277 / 7,958 = 79% of operating cash flow. ROE 6,998 / ((20,415 + 19,001) / 2) = 35.5% (FY2025), 40.6% (FY2024), 48.0% (FY2023). Trailing twelve months to July 2026: revenue 6,800 + 24,037 = 30,837; net income 1,897 + 7,370 = 9,267; operating cash flow 2,828 + 5,568 = 8,396; capital expenditure 785 + 1,988 = 2,773. Implied FY2026 revenue at the guidance midpoint 24,037 + 10,250 = 34,287, 34,287 / 28,368 - 1 = 20.9%; fourth-quarter midpoint 10,250 / 6,800 - 1 = 50.7%; implied non-GAAP EPS 8.73 + 4.02 = 12.75. Market: 376,360 / 9,267 = 40.6 times trailing earnings; 376,360 / 30,837 = 12.2 times sales; price 474.25 / 723.00 - 1 = -34.4%; Lam Research 384.36 - 376.36 = 8.00 bn more market value. ASML 662.45 / 376.36 = 1.8 times; KLA 246.05 / 376.36 = 0.65. Calendar year-end 2025 P/E 203,780 / 6,998 = 29.1; fiscal year-end P/E 40.91 / 11.83 = 3.5 times the FY2022 low. Other: services growth FY2025 6,385 / 6,225 - 1 = 2.6%; company revenue 28,368 / 27,176 - 1 = 4.4%; dividends 1,384 / 7,958 = 17.4% of operating cash flow; two largest customers FY2024 12% + 11% = 23%; Korea 1,521 / 1,160 - 1 = 31%; Semiconductor Systems 20,798 / 11,367 = 1.83 times (FY2020-FY2025); Display 1,060 / 1,607 - 1 = -34%; net income 6,998 / 1,377 = 5.1 times and EPS 8.66 / 1.12 = 7.7 times (FY2015-FY2025); revenue 28,368 / 9,659 = 2.9 times; balance sheet build July 2026 6,564 + 7,691 + 5,606 = 19,861; Display revenue excluded from Corporate and Other FY2025 1,185 - 1,060 = 125. Revenue FY2024 27,176 / 26,517 - 1 = 2.5%; R&D Q4 917 / 858 - 1 = 6.9%; revenue 30,837 / 25,785 - 1 = 19.6% (FY2022 to trailing July 2026); strategic investment gains 755 + 949 = 1,704; China less Taiwan nine months 6,688 - 5,902 = 786; forward earnings implied 40.91 / 26.95 = 1.52 times trailing; Q4 guide 10,250 / 9,115 - 1 = 12.5% above Q3. Memory share of systems revenue: DRAM plus flash 19% + 21% = 40% (FY2021), 17% + 6% = 23% (FY2023), 26% + 7% = 33% (FY2025). Market value 376,360 / 182,232 = 2.07 times the FY2025 year-end value; trailing net income 9,267 / 6,998 - 1 = 32%. Operating income 8,289 / 1,693 = 4.9 times (FY2015-FY2025). P/E gap to Lam 57.7 - 40.9 = 16.8. Q3 FY2026 returns 860 / 3,037 = 28% of operating cash flow. China plus Taiwan nine months (6,688 + 5,902) / 24,037 = 52%. Systems revenue Q1 to Q3 FY2026 7,040 / 5,141 - 1 = 37%. Systems share of segment operating income FY2025 7,379 / (7,379 + 1,792) = 7,379 / 9,171 = 80%. Systems R&D 3,042 / 20,798 = 14.6%. Third quarter share of nine-month systems profit 2,657 / 6,176 = 43%. Services FY2024 6,225 / 5,732 - 1 = 8.6%. Services share of backlog 4,335 / 11,758 = 37% (October 2021). Research per diluted share 1,451 / 1,226 = 1.18 (FY2015) and 3,570 / 808 = 4.42 (FY2025). Net cash plus long-term investments 2,689 + 5,268 = 7,957. Dividends per share 1.78 / 1.22 - 1 = 46%. ROE 35.5% / 10% = 3.5 times - segment shares, margins and growth - segment and company margins, research and tax. — FY2015-FY2026 · publ. September 2026 · source ↗
    Method: Arithmetic on figures reported in Applied Materials' Forms 10-K and 10-Q, results releases and market data; operands shown in the source line.
  6. Moat Explorer calcIt grew at about 12.8% a year from fiscal 2020.
    Moat Explorer calculation from Applied Materials' reported figures ($ millions unless stated). Segment shares FY2025: Semiconductor Systems 20,798 / 28,368 = 73.3%; Applied Global Services 6,385 / 28,368 = 22.5%; Corporate and Other 1,185 / 28,368 = 4.2%. Segment operating margins FY2025: 7,379 / 20,798 = 35.5%; 1,792 / 6,385 = 28.1%; FY2024 6,981 / 19,911 = 35.1%, 1,812 / 6,225 = 29.1%; FY2023 6,879 / 19,698 = 34.9%, 1,529 / 5,732 = 26.7%. Q3 FY2026 margins: Semiconductor Systems 2,657 / 7,040 = 37.7%; Applied Global Services 536 / 1,781 = 30.1%; company operating margin 3,075 / 9,115 = 33.7%. Q1 FY2026 Semiconductor Systems 1,427 / 5,141 = 27.8%. Nine months FY2026 6,176 / 18,146 = 34.0% and 1,461 / 5,005 = 29.2%. Growth Q3 FY2026: Semiconductor Systems 7,040 / 5,564 - 1 = 26.5% year on year and 7,040 / 5,965 - 1 = 18.0% on the quarter; Applied Global Services 1,781 / 1,463 - 1 = 21.7%; revenue 9,115 / 7,910 - 1 = 15.2% on the quarter; United States revenue 1,367 / 683 - 1 = 100%; Europe 483 / 160 = 3.0 times. Nine months: 18,146 / 16,562 - 1 = 9.6%; 5,005 / 4,236 - 1 = 18.2%. Segment history, revenue: Semiconductor Systems 11,367 (FY2020), 16,286, 18,797, 19,698, 19,911, 20,798 (FY2025), compound growth (20,798 / 11,367)^(1/5) - 1 = 12.8% a year; Applied Global Services 4,155, 5,013, 5,543, 5,732, 6,225, 6,385, compound growth (6,385 / 4,155)^(1/5) - 1 = 9.0% a year, 6,385 / 5,732 - 1 = 11.4% over two years; Corporate and Other including Display 1,607 + 73 = 1,680 (FY2020), 1,634 + 130 = 1,764 (FY2021), 1,331 + 114 = 1,445 (FY2022), 868 + 219 = 1,087, 885 + 155 = 1,040, 1,185 (FY2025); 1,185 / 1,680 - 1 = -29%. Display operating margin 235 / 1,060 = 22% (FY2025) and 51 / 885 = 6% (FY2024). DRAM equipment 26% x 20,798 = about 5,400; flash 7% x 20,798 = about 1,460. Company margins: gross 13,808 / 28,368 = 48.7% (FY2025), 12,897 / 27,176 = 47.5% (FY2024), 12,384 / 26,517 = 46.7% (FY2023); operating 8,289 / 28,368 = 29.2%. R&D 3,570 / 28,368 = 12.6%; 3,570 / 1,451 = 2.5 times (FY2015-FY2025). Effective tax 2,273 / 9,271 = 24.5% (FY2025) and 975 / 8,152 = 12.0% (FY2024). Revenue FY2019 14,608 / 16,705 - 1 = -12.6%. Diluted shares 808 / 1,226 - 1 = -34%. Revenue outside the United States 25,305 / 28,368 = 89%. China share of revenue: 5,456 / 17,202 = 31.7% (FY2020); 7,535 / 23,063 = 32.7%; 7,254 / 25,785 = 28.1%; 7,247 / 26,517 = 27.3%; 10,117 / 27,176 = 37.2% (FY2024); 8,529 / 28,368 = 30.1% (FY2025). Taiwan 6,857 / 4,010 - 1 = 71%. Two largest customers 19% + 15% = 34% (FY2025) and 20% + 14% = 34% (nine months FY2026). Backlog: 15,002 / 19,011 - 1 = -21% (October 2022 to October 2025); Semiconductor Systems 7,105 / 12,691 - 1 = -44%; Applied Global Services 7,141 / 5,643 - 1 = +27%; shares of backlog 7,141 / 15,002 = 48% and 7,105 / 15,002 = 47%. Contract liabilities 3,271 / 2,566 - 1 = +27%; receivables 7,691 / 5,185 - 1 = +48%. Cash: net cash 7,241 + 1,332 - 100 - 6,455 = 2,018 (October 2025); 8,022 + 1,449 - 799 - 5,460 = 3,212 (October 2024); 7,037 + 2,196 - 1,299 - 5,245 = 2,689 (July 2026). Payout 1,384 / 6,998 = 19.8%; dividends plus buybacks 1,384 + 4,893 = 6,277, 6,277 / 7,958 = 79% of operating cash flow. ROE 6,998 / ((20,415 + 19,001) / 2) = 35.5% (FY2025), 40.6% (FY2024), 48.0% (FY2023). Trailing twelve months to July 2026: revenue 6,800 + 24,037 = 30,837; net income 1,897 + 7,370 = 9,267; operating cash flow 2,828 + 5,568 = 8,396; capital expenditure 785 + 1,988 = 2,773. Implied FY2026 revenue at the guidance midpoint 24,037 + 10,250 = 34,287, 34,287 / 28,368 - 1 = 20.9%; fourth-quarter midpoint 10,250 / 6,800 - 1 = 50.7%; implied non-GAAP EPS 8.73 + 4.02 = 12.75. Market: 376,360 / 9,267 = 40.6 times trailing earnings; 376,360 / 30,837 = 12.2 times sales; price 474.25 / 723.00 - 1 = -34.4%; Lam Research 384.36 - 376.36 = 8.00 bn more market value. ASML 662.45 / 376.36 = 1.8 times; KLA 246.05 / 376.36 = 0.65. Calendar year-end 2025 P/E 203,780 / 6,998 = 29.1; fiscal year-end P/E 40.91 / 11.83 = 3.5 times the FY2022 low. Other: services growth FY2025 6,385 / 6,225 - 1 = 2.6%; company revenue 28,368 / 27,176 - 1 = 4.4%; dividends 1,384 / 7,958 = 17.4% of operating cash flow; two largest customers FY2024 12% + 11% = 23%; Korea 1,521 / 1,160 - 1 = 31%; Semiconductor Systems 20,798 / 11,367 = 1.83 times (FY2020-FY2025); Display 1,060 / 1,607 - 1 = -34%; net income 6,998 / 1,377 = 5.1 times and EPS 8.66 / 1.12 = 7.7 times (FY2015-FY2025); revenue 28,368 / 9,659 = 2.9 times; balance sheet build July 2026 6,564 + 7,691 + 5,606 = 19,861; Display revenue excluded from Corporate and Other FY2025 1,185 - 1,060 = 125. Revenue FY2024 27,176 / 26,517 - 1 = 2.5%; R&D Q4 917 / 858 - 1 = 6.9%; revenue 30,837 / 25,785 - 1 = 19.6% (FY2022 to trailing July 2026); strategic investment gains 755 + 949 = 1,704; China less Taiwan nine months 6,688 - 5,902 = 786; forward earnings implied 40.91 / 26.95 = 1.52 times trailing; Q4 guide 10,250 / 9,115 - 1 = 12.5% above Q3. Memory share of systems revenue: DRAM plus flash 19% + 21% = 40% (FY2021), 17% + 6% = 23% (FY2023), 26% + 7% = 33% (FY2025). Market value 376,360 / 182,232 = 2.07 times the FY2025 year-end value; trailing net income 9,267 / 6,998 - 1 = 32%. Operating income 8,289 / 1,693 = 4.9 times (FY2015-FY2025). P/E gap to Lam 57.7 - 40.9 = 16.8. Q3 FY2026 returns 860 / 3,037 = 28% of operating cash flow. China plus Taiwan nine months (6,688 + 5,902) / 24,037 = 52%. Systems revenue Q1 to Q3 FY2026 7,040 / 5,141 - 1 = 37%. Systems share of segment operating income FY2025 7,379 / (7,379 + 1,792) = 7,379 / 9,171 = 80%. Systems R&D 3,042 / 20,798 = 14.6%. Third quarter share of nine-month systems profit 2,657 / 6,176 = 43%. Services FY2024 6,225 / 5,732 - 1 = 8.6%. Services share of backlog 4,335 / 11,758 = 37% (October 2021). Research per diluted share 1,451 / 1,226 = 1.18 (FY2015) and 3,570 / 808 = 4.42 (FY2025). Net cash plus long-term investments 2,689 + 5,268 = 7,957. Dividends per share 1.78 / 1.22 - 1 = 46%. ROE 35.5% / 10% = 3.5 times - segment shares, margins and growth - segment revenue shares and growth. — FY2015-FY2026 · publ. September 2026 · source ↗
    Method: Arithmetic on figures reported in Applied Materials' Forms 10-K and 10-Q, results releases and market data; operands shown in the source line.
  7. ReportedApplied calls itself a "materials engineering" company for this reason: its tools change what a wafer is made of, layer by layer.
    Applied Materials third-quarter fiscal 2026 results release, Form 8-K exhibit 99.1 - record revenue, segment results, revenue by geography, employees and fourth-quarter guidance - highlights, income statement, cash flow, quotes and fourth-quarter guidance. — Q3 FY2026 · publ. 13 August 2026 · source ↗
  8. ReportedLam Research, Tokyo Electron and KLA, which rank beside it in the industry's top five, each compete with it in some of these steps.
    TechInsights, top IC manufacturing equipment suppliers 2025 - ASML led with $27.5 billion of revenue; Applied Materials, Lam Research, Tokyo Electron and KLA completed the top five, unchanged from 2024. — 2025 · publ. 2026 · source ↗
  9. ReportedBut the segment's margin and its research budget, $3,042 million of the company's $3,570 million in fiscal 2025, have both grown through the last cycle.
    Applied Materials Form 10-K for fiscal 2025 (year ended 26 October 2025) - segment note: revenue, operating income, gross margin, research, capital spending and goodwill. — FY2025 · publ. 12 December 2025 · source ↗
  10. ReportedSpeaking in May 2026 he described Applied "As the largest process equipment company in the fastest growing markets".
    Applied Materials second-quarter fiscal 2026 results release, Form 8-K exhibit 99.1 - the 15% dividend increase and the calendar-2026 outlook. — Q2 FY2026 · publ. 14 May 2026 · source ↗
  11. Moat Explorer calcWhat supports it in the filings is the list of steps the segment serves and a segment margin that has stayed above a third of revenue for three years.
    Moat Explorer calculation from Applied Materials' reported figures ($ millions unless stated). Segment shares FY2025: Semiconductor Systems 20,798 / 28,368 = 73.3%; Applied Global Services 6,385 / 28,368 = 22.5%; Corporate and Other 1,185 / 28,368 = 4.2%. Segment operating margins FY2025: 7,379 / 20,798 = 35.5%; 1,792 / 6,385 = 28.1%; FY2024 6,981 / 19,911 = 35.1%, 1,812 / 6,225 = 29.1%; FY2023 6,879 / 19,698 = 34.9%, 1,529 / 5,732 = 26.7%. Q3 FY2026 margins: Semiconductor Systems 2,657 / 7,040 = 37.7%; Applied Global Services 536 / 1,781 = 30.1%; company operating margin 3,075 / 9,115 = 33.7%. Q1 FY2026 Semiconductor Systems 1,427 / 5,141 = 27.8%. Nine months FY2026 6,176 / 18,146 = 34.0% and 1,461 / 5,005 = 29.2%. Growth Q3 FY2026: Semiconductor Systems 7,040 / 5,564 - 1 = 26.5% year on year and 7,040 / 5,965 - 1 = 18.0% on the quarter; Applied Global Services 1,781 / 1,463 - 1 = 21.7%; revenue 9,115 / 7,910 - 1 = 15.2% on the quarter; United States revenue 1,367 / 683 - 1 = 100%; Europe 483 / 160 = 3.0 times. Nine months: 18,146 / 16,562 - 1 = 9.6%; 5,005 / 4,236 - 1 = 18.2%. Segment history, revenue: Semiconductor Systems 11,367 (FY2020), 16,286, 18,797, 19,698, 19,911, 20,798 (FY2025), compound growth (20,798 / 11,367)^(1/5) - 1 = 12.8% a year; Applied Global Services 4,155, 5,013, 5,543, 5,732, 6,225, 6,385, compound growth (6,385 / 4,155)^(1/5) - 1 = 9.0% a year, 6,385 / 5,732 - 1 = 11.4% over two years; Corporate and Other including Display 1,607 + 73 = 1,680 (FY2020), 1,634 + 130 = 1,764 (FY2021), 1,331 + 114 = 1,445 (FY2022), 868 + 219 = 1,087, 885 + 155 = 1,040, 1,185 (FY2025); 1,185 / 1,680 - 1 = -29%. Display operating margin 235 / 1,060 = 22% (FY2025) and 51 / 885 = 6% (FY2024). DRAM equipment 26% x 20,798 = about 5,400; flash 7% x 20,798 = about 1,460. Company margins: gross 13,808 / 28,368 = 48.7% (FY2025), 12,897 / 27,176 = 47.5% (FY2024), 12,384 / 26,517 = 46.7% (FY2023); operating 8,289 / 28,368 = 29.2%. R&D 3,570 / 28,368 = 12.6%; 3,570 / 1,451 = 2.5 times (FY2015-FY2025). Effective tax 2,273 / 9,271 = 24.5% (FY2025) and 975 / 8,152 = 12.0% (FY2024). Revenue FY2019 14,608 / 16,705 - 1 = -12.6%. Diluted shares 808 / 1,226 - 1 = -34%. Revenue outside the United States 25,305 / 28,368 = 89%. China share of revenue: 5,456 / 17,202 = 31.7% (FY2020); 7,535 / 23,063 = 32.7%; 7,254 / 25,785 = 28.1%; 7,247 / 26,517 = 27.3%; 10,117 / 27,176 = 37.2% (FY2024); 8,529 / 28,368 = 30.1% (FY2025). Taiwan 6,857 / 4,010 - 1 = 71%. Two largest customers 19% + 15% = 34% (FY2025) and 20% + 14% = 34% (nine months FY2026). Backlog: 15,002 / 19,011 - 1 = -21% (October 2022 to October 2025); Semiconductor Systems 7,105 / 12,691 - 1 = -44%; Applied Global Services 7,141 / 5,643 - 1 = +27%; shares of backlog 7,141 / 15,002 = 48% and 7,105 / 15,002 = 47%. Contract liabilities 3,271 / 2,566 - 1 = +27%; receivables 7,691 / 5,185 - 1 = +48%. Cash: net cash 7,241 + 1,332 - 100 - 6,455 = 2,018 (October 2025); 8,022 + 1,449 - 799 - 5,460 = 3,212 (October 2024); 7,037 + 2,196 - 1,299 - 5,245 = 2,689 (July 2026). Payout 1,384 / 6,998 = 19.8%; dividends plus buybacks 1,384 + 4,893 = 6,277, 6,277 / 7,958 = 79% of operating cash flow. ROE 6,998 / ((20,415 + 19,001) / 2) = 35.5% (FY2025), 40.6% (FY2024), 48.0% (FY2023). Trailing twelve months to July 2026: revenue 6,800 + 24,037 = 30,837; net income 1,897 + 7,370 = 9,267; operating cash flow 2,828 + 5,568 = 8,396; capital expenditure 785 + 1,988 = 2,773. Implied FY2026 revenue at the guidance midpoint 24,037 + 10,250 = 34,287, 34,287 / 28,368 - 1 = 20.9%; fourth-quarter midpoint 10,250 / 6,800 - 1 = 50.7%; implied non-GAAP EPS 8.73 + 4.02 = 12.75. Market: 376,360 / 9,267 = 40.6 times trailing earnings; 376,360 / 30,837 = 12.2 times sales; price 474.25 / 723.00 - 1 = -34.4%; Lam Research 384.36 - 376.36 = 8.00 bn more market value. ASML 662.45 / 376.36 = 1.8 times; KLA 246.05 / 376.36 = 0.65. Calendar year-end 2025 P/E 203,780 / 6,998 = 29.1; fiscal year-end P/E 40.91 / 11.83 = 3.5 times the FY2022 low. Other: services growth FY2025 6,385 / 6,225 - 1 = 2.6%; company revenue 28,368 / 27,176 - 1 = 4.4%; dividends 1,384 / 7,958 = 17.4% of operating cash flow; two largest customers FY2024 12% + 11% = 23%; Korea 1,521 / 1,160 - 1 = 31%; Semiconductor Systems 20,798 / 11,367 = 1.83 times (FY2020-FY2025); Display 1,060 / 1,607 - 1 = -34%; net income 6,998 / 1,377 = 5.1 times and EPS 8.66 / 1.12 = 7.7 times (FY2015-FY2025); revenue 28,368 / 9,659 = 2.9 times; balance sheet build July 2026 6,564 + 7,691 + 5,606 = 19,861; Display revenue excluded from Corporate and Other FY2025 1,185 - 1,060 = 125. Revenue FY2024 27,176 / 26,517 - 1 = 2.5%; R&D Q4 917 / 858 - 1 = 6.9%; revenue 30,837 / 25,785 - 1 = 19.6% (FY2022 to trailing July 2026); strategic investment gains 755 + 949 = 1,704; China less Taiwan nine months 6,688 - 5,902 = 786; forward earnings implied 40.91 / 26.95 = 1.52 times trailing; Q4 guide 10,250 / 9,115 - 1 = 12.5% above Q3. Memory share of systems revenue: DRAM plus flash 19% + 21% = 40% (FY2021), 17% + 6% = 23% (FY2023), 26% + 7% = 33% (FY2025). Market value 376,360 / 182,232 = 2.07 times the FY2025 year-end value; trailing net income 9,267 / 6,998 - 1 = 32%. Operating income 8,289 / 1,693 = 4.9 times (FY2015-FY2025). P/E gap to Lam 57.7 - 40.9 = 16.8. Q3 FY2026 returns 860 / 3,037 = 28% of operating cash flow. China plus Taiwan nine months (6,688 + 5,902) / 24,037 = 52%. Systems revenue Q1 to Q3 FY2026 7,040 / 5,141 - 1 = 37%. Systems share of segment operating income FY2025 7,379 / (7,379 + 1,792) = 7,379 / 9,171 = 80%. Systems R&D 3,042 / 20,798 = 14.6%. Third quarter share of nine-month systems profit 2,657 / 6,176 = 43%. Services FY2024 6,225 / 5,732 - 1 = 8.6%. Services share of backlog 4,335 / 11,758 = 37% (October 2021). Research per diluted share 1,451 / 1,226 = 1.18 (FY2015) and 3,570 / 808 = 4.42 (FY2025). Net cash plus long-term investments 2,689 + 5,268 = 7,957. Dividends per share 1.78 / 1.22 - 1 = 46%. ROE 35.5% / 10% = 3.5 times - segment shares, margins and growth - segment and company margins, research and tax. — FY2015-FY2026 · publ. September 2026 · source ↗
    Method: Arithmetic on figures reported in Applied Materials' Forms 10-K and 10-Q, results releases and market data; operands shown in the source line.
  12. ReportedSystems revenue fell to $5,141 million from $5,597 million, and operating income to $1,427 million from $1,872 million, as Chinese customers were restricted and the settlement charge landed.
    Applied Materials Form 10-Q for the quarter ended 26 July 2026 - FY2026 segment basis (200mm moved to Semiconductor Systems), nine-month results, customer concentration, geography, the BIS settlement and the balance sheet - nine-month results, customer concentration, geography, capital returns and legal matters. — Q3 FY2026 · publ. 20 August 2026 · source ↗
  13. Moat Explorer calcBy the third quarter revenue was up 26.5% on a year earlier.
    Moat Explorer calculation from Applied Materials' reported figures ($ millions unless stated). Segment shares FY2025: Semiconductor Systems 20,798 / 28,368 = 73.3%; Applied Global Services 6,385 / 28,368 = 22.5%; Corporate and Other 1,185 / 28,368 = 4.2%. Segment operating margins FY2025: 7,379 / 20,798 = 35.5%; 1,792 / 6,385 = 28.1%; FY2024 6,981 / 19,911 = 35.1%, 1,812 / 6,225 = 29.1%; FY2023 6,879 / 19,698 = 34.9%, 1,529 / 5,732 = 26.7%. Q3 FY2026 margins: Semiconductor Systems 2,657 / 7,040 = 37.7%; Applied Global Services 536 / 1,781 = 30.1%; company operating margin 3,075 / 9,115 = 33.7%. Q1 FY2026 Semiconductor Systems 1,427 / 5,141 = 27.8%. Nine months FY2026 6,176 / 18,146 = 34.0% and 1,461 / 5,005 = 29.2%. Growth Q3 FY2026: Semiconductor Systems 7,040 / 5,564 - 1 = 26.5% year on year and 7,040 / 5,965 - 1 = 18.0% on the quarter; Applied Global Services 1,781 / 1,463 - 1 = 21.7%; revenue 9,115 / 7,910 - 1 = 15.2% on the quarter; United States revenue 1,367 / 683 - 1 = 100%; Europe 483 / 160 = 3.0 times. Nine months: 18,146 / 16,562 - 1 = 9.6%; 5,005 / 4,236 - 1 = 18.2%. Segment history, revenue: Semiconductor Systems 11,367 (FY2020), 16,286, 18,797, 19,698, 19,911, 20,798 (FY2025), compound growth (20,798 / 11,367)^(1/5) - 1 = 12.8% a year; Applied Global Services 4,155, 5,013, 5,543, 5,732, 6,225, 6,385, compound growth (6,385 / 4,155)^(1/5) - 1 = 9.0% a year, 6,385 / 5,732 - 1 = 11.4% over two years; Corporate and Other including Display 1,607 + 73 = 1,680 (FY2020), 1,634 + 130 = 1,764 (FY2021), 1,331 + 114 = 1,445 (FY2022), 868 + 219 = 1,087, 885 + 155 = 1,040, 1,185 (FY2025); 1,185 / 1,680 - 1 = -29%. Display operating margin 235 / 1,060 = 22% (FY2025) and 51 / 885 = 6% (FY2024). DRAM equipment 26% x 20,798 = about 5,400; flash 7% x 20,798 = about 1,460. Company margins: gross 13,808 / 28,368 = 48.7% (FY2025), 12,897 / 27,176 = 47.5% (FY2024), 12,384 / 26,517 = 46.7% (FY2023); operating 8,289 / 28,368 = 29.2%. R&D 3,570 / 28,368 = 12.6%; 3,570 / 1,451 = 2.5 times (FY2015-FY2025). Effective tax 2,273 / 9,271 = 24.5% (FY2025) and 975 / 8,152 = 12.0% (FY2024). Revenue FY2019 14,608 / 16,705 - 1 = -12.6%. Diluted shares 808 / 1,226 - 1 = -34%. Revenue outside the United States 25,305 / 28,368 = 89%. China share of revenue: 5,456 / 17,202 = 31.7% (FY2020); 7,535 / 23,063 = 32.7%; 7,254 / 25,785 = 28.1%; 7,247 / 26,517 = 27.3%; 10,117 / 27,176 = 37.2% (FY2024); 8,529 / 28,368 = 30.1% (FY2025). Taiwan 6,857 / 4,010 - 1 = 71%. Two largest customers 19% + 15% = 34% (FY2025) and 20% + 14% = 34% (nine months FY2026). Backlog: 15,002 / 19,011 - 1 = -21% (October 2022 to October 2025); Semiconductor Systems 7,105 / 12,691 - 1 = -44%; Applied Global Services 7,141 / 5,643 - 1 = +27%; shares of backlog 7,141 / 15,002 = 48% and 7,105 / 15,002 = 47%. Contract liabilities 3,271 / 2,566 - 1 = +27%; receivables 7,691 / 5,185 - 1 = +48%. Cash: net cash 7,241 + 1,332 - 100 - 6,455 = 2,018 (October 2025); 8,022 + 1,449 - 799 - 5,460 = 3,212 (October 2024); 7,037 + 2,196 - 1,299 - 5,245 = 2,689 (July 2026). Payout 1,384 / 6,998 = 19.8%; dividends plus buybacks 1,384 + 4,893 = 6,277, 6,277 / 7,958 = 79% of operating cash flow. ROE 6,998 / ((20,415 + 19,001) / 2) = 35.5% (FY2025), 40.6% (FY2024), 48.0% (FY2023). Trailing twelve months to July 2026: revenue 6,800 + 24,037 = 30,837; net income 1,897 + 7,370 = 9,267; operating cash flow 2,828 + 5,568 = 8,396; capital expenditure 785 + 1,988 = 2,773. Implied FY2026 revenue at the guidance midpoint 24,037 + 10,250 = 34,287, 34,287 / 28,368 - 1 = 20.9%; fourth-quarter midpoint 10,250 / 6,800 - 1 = 50.7%; implied non-GAAP EPS 8.73 + 4.02 = 12.75. Market: 376,360 / 9,267 = 40.6 times trailing earnings; 376,360 / 30,837 = 12.2 times sales; price 474.25 / 723.00 - 1 = -34.4%; Lam Research 384.36 - 376.36 = 8.00 bn more market value. ASML 662.45 / 376.36 = 1.8 times; KLA 246.05 / 376.36 = 0.65. Calendar year-end 2025 P/E 203,780 / 6,998 = 29.1; fiscal year-end P/E 40.91 / 11.83 = 3.5 times the FY2022 low. Other: services growth FY2025 6,385 / 6,225 - 1 = 2.6%; company revenue 28,368 / 27,176 - 1 = 4.4%; dividends 1,384 / 7,958 = 17.4% of operating cash flow; two largest customers FY2024 12% + 11% = 23%; Korea 1,521 / 1,160 - 1 = 31%; Semiconductor Systems 20,798 / 11,367 = 1.83 times (FY2020-FY2025); Display 1,060 / 1,607 - 1 = -34%; net income 6,998 / 1,377 = 5.1 times and EPS 8.66 / 1.12 = 7.7 times (FY2015-FY2025); revenue 28,368 / 9,659 = 2.9 times; balance sheet build July 2026 6,564 + 7,691 + 5,606 = 19,861; Display revenue excluded from Corporate and Other FY2025 1,185 - 1,060 = 125. Revenue FY2024 27,176 / 26,517 - 1 = 2.5%; R&D Q4 917 / 858 - 1 = 6.9%; revenue 30,837 / 25,785 - 1 = 19.6% (FY2022 to trailing July 2026); strategic investment gains 755 + 949 = 1,704; China less Taiwan nine months 6,688 - 5,902 = 786; forward earnings implied 40.91 / 26.95 = 1.52 times trailing; Q4 guide 10,250 / 9,115 - 1 = 12.5% above Q3. Memory share of systems revenue: DRAM plus flash 19% + 21% = 40% (FY2021), 17% + 6% = 23% (FY2023), 26% + 7% = 33% (FY2025). Market value 376,360 / 182,232 = 2.07 times the FY2025 year-end value; trailing net income 9,267 / 6,998 - 1 = 32%. Operating income 8,289 / 1,693 = 4.9 times (FY2015-FY2025). P/E gap to Lam 57.7 - 40.9 = 16.8. Q3 FY2026 returns 860 / 3,037 = 28% of operating cash flow. China plus Taiwan nine months (6,688 + 5,902) / 24,037 = 52%. Systems revenue Q1 to Q3 FY2026 7,040 / 5,141 - 1 = 37%. Systems share of segment operating income FY2025 7,379 / (7,379 + 1,792) = 7,379 / 9,171 = 80%. Systems R&D 3,042 / 20,798 = 14.6%. Third quarter share of nine-month systems profit 2,657 / 6,176 = 43%. Services FY2024 6,225 / 5,732 - 1 = 8.6%. Services share of backlog 4,335 / 11,758 = 37% (October 2021). Research per diluted share 1,451 / 1,226 = 1.18 (FY2015) and 3,570 / 808 = 4.42 (FY2025). Net cash plus long-term investments 2,689 + 5,268 = 7,957. Dividends per share 1.78 / 1.22 - 1 = 46%. ROE 35.5% / 10% = 3.5 times - segment shares, margins and growth - segment revenue shares and growth. — FY2015-FY2026 · publ. September 2026 · source ↗
    Method: Arithmetic on figures reported in Applied Materials' Forms 10-K and 10-Q, results releases and market data; operands shown in the source line.
  14. ReportedSemiconductor Systems carried $3,042 million of research in fiscal 2025, about 15% of its own revenue.
    Applied Materials Form 10-K for fiscal 2025 (year ended 26 October 2025) - segment note: revenue, operating income, gross margin, research, capital spending and goodwill. — FY2025 · publ. 12 December 2025 · source ↗
  15. Moat Explorer calcSemiconductor Systems carried $3,042 million of research in fiscal 2025, about 15% of its own revenue.
    Moat Explorer calculation from Applied Materials' reported figures ($ millions unless stated). Segment shares FY2025: Semiconductor Systems 20,798 / 28,368 = 73.3%; Applied Global Services 6,385 / 28,368 = 22.5%; Corporate and Other 1,185 / 28,368 = 4.2%. Segment operating margins FY2025: 7,379 / 20,798 = 35.5%; 1,792 / 6,385 = 28.1%; FY2024 6,981 / 19,911 = 35.1%, 1,812 / 6,225 = 29.1%; FY2023 6,879 / 19,698 = 34.9%, 1,529 / 5,732 = 26.7%. Q3 FY2026 margins: Semiconductor Systems 2,657 / 7,040 = 37.7%; Applied Global Services 536 / 1,781 = 30.1%; company operating margin 3,075 / 9,115 = 33.7%. Q1 FY2026 Semiconductor Systems 1,427 / 5,141 = 27.8%. Nine months FY2026 6,176 / 18,146 = 34.0% and 1,461 / 5,005 = 29.2%. Growth Q3 FY2026: Semiconductor Systems 7,040 / 5,564 - 1 = 26.5% year on year and 7,040 / 5,965 - 1 = 18.0% on the quarter; Applied Global Services 1,781 / 1,463 - 1 = 21.7%; revenue 9,115 / 7,910 - 1 = 15.2% on the quarter; United States revenue 1,367 / 683 - 1 = 100%; Europe 483 / 160 = 3.0 times. Nine months: 18,146 / 16,562 - 1 = 9.6%; 5,005 / 4,236 - 1 = 18.2%. Segment history, revenue: Semiconductor Systems 11,367 (FY2020), 16,286, 18,797, 19,698, 19,911, 20,798 (FY2025), compound growth (20,798 / 11,367)^(1/5) - 1 = 12.8% a year; Applied Global Services 4,155, 5,013, 5,543, 5,732, 6,225, 6,385, compound growth (6,385 / 4,155)^(1/5) - 1 = 9.0% a year, 6,385 / 5,732 - 1 = 11.4% over two years; Corporate and Other including Display 1,607 + 73 = 1,680 (FY2020), 1,634 + 130 = 1,764 (FY2021), 1,331 + 114 = 1,445 (FY2022), 868 + 219 = 1,087, 885 + 155 = 1,040, 1,185 (FY2025); 1,185 / 1,680 - 1 = -29%. Display operating margin 235 / 1,060 = 22% (FY2025) and 51 / 885 = 6% (FY2024). DRAM equipment 26% x 20,798 = about 5,400; flash 7% x 20,798 = about 1,460. Company margins: gross 13,808 / 28,368 = 48.7% (FY2025), 12,897 / 27,176 = 47.5% (FY2024), 12,384 / 26,517 = 46.7% (FY2023); operating 8,289 / 28,368 = 29.2%. R&D 3,570 / 28,368 = 12.6%; 3,570 / 1,451 = 2.5 times (FY2015-FY2025). Effective tax 2,273 / 9,271 = 24.5% (FY2025) and 975 / 8,152 = 12.0% (FY2024). Revenue FY2019 14,608 / 16,705 - 1 = -12.6%. Diluted shares 808 / 1,226 - 1 = -34%. Revenue outside the United States 25,305 / 28,368 = 89%. China share of revenue: 5,456 / 17,202 = 31.7% (FY2020); 7,535 / 23,063 = 32.7%; 7,254 / 25,785 = 28.1%; 7,247 / 26,517 = 27.3%; 10,117 / 27,176 = 37.2% (FY2024); 8,529 / 28,368 = 30.1% (FY2025). Taiwan 6,857 / 4,010 - 1 = 71%. Two largest customers 19% + 15% = 34% (FY2025) and 20% + 14% = 34% (nine months FY2026). Backlog: 15,002 / 19,011 - 1 = -21% (October 2022 to October 2025); Semiconductor Systems 7,105 / 12,691 - 1 = -44%; Applied Global Services 7,141 / 5,643 - 1 = +27%; shares of backlog 7,141 / 15,002 = 48% and 7,105 / 15,002 = 47%. Contract liabilities 3,271 / 2,566 - 1 = +27%; receivables 7,691 / 5,185 - 1 = +48%. Cash: net cash 7,241 + 1,332 - 100 - 6,455 = 2,018 (October 2025); 8,022 + 1,449 - 799 - 5,460 = 3,212 (October 2024); 7,037 + 2,196 - 1,299 - 5,245 = 2,689 (July 2026). Payout 1,384 / 6,998 = 19.8%; dividends plus buybacks 1,384 + 4,893 = 6,277, 6,277 / 7,958 = 79% of operating cash flow. ROE 6,998 / ((20,415 + 19,001) / 2) = 35.5% (FY2025), 40.6% (FY2024), 48.0% (FY2023). Trailing twelve months to July 2026: revenue 6,800 + 24,037 = 30,837; net income 1,897 + 7,370 = 9,267; operating cash flow 2,828 + 5,568 = 8,396; capital expenditure 785 + 1,988 = 2,773. Implied FY2026 revenue at the guidance midpoint 24,037 + 10,250 = 34,287, 34,287 / 28,368 - 1 = 20.9%; fourth-quarter midpoint 10,250 / 6,800 - 1 = 50.7%; implied non-GAAP EPS 8.73 + 4.02 = 12.75. Market: 376,360 / 9,267 = 40.6 times trailing earnings; 376,360 / 30,837 = 12.2 times sales; price 474.25 / 723.00 - 1 = -34.4%; Lam Research 384.36 - 376.36 = 8.00 bn more market value. ASML 662.45 / 376.36 = 1.8 times; KLA 246.05 / 376.36 = 0.65. Calendar year-end 2025 P/E 203,780 / 6,998 = 29.1; fiscal year-end P/E 40.91 / 11.83 = 3.5 times the FY2022 low. Other: services growth FY2025 6,385 / 6,225 - 1 = 2.6%; company revenue 28,368 / 27,176 - 1 = 4.4%; dividends 1,384 / 7,958 = 17.4% of operating cash flow; two largest customers FY2024 12% + 11% = 23%; Korea 1,521 / 1,160 - 1 = 31%; Semiconductor Systems 20,798 / 11,367 = 1.83 times (FY2020-FY2025); Display 1,060 / 1,607 - 1 = -34%; net income 6,998 / 1,377 = 5.1 times and EPS 8.66 / 1.12 = 7.7 times (FY2015-FY2025); revenue 28,368 / 9,659 = 2.9 times; balance sheet build July 2026 6,564 + 7,691 + 5,606 = 19,861; Display revenue excluded from Corporate and Other FY2025 1,185 - 1,060 = 125. Revenue FY2024 27,176 / 26,517 - 1 = 2.5%; R&D Q4 917 / 858 - 1 = 6.9%; revenue 30,837 / 25,785 - 1 = 19.6% (FY2022 to trailing July 2026); strategic investment gains 755 + 949 = 1,704; China less Taiwan nine months 6,688 - 5,902 = 786; forward earnings implied 40.91 / 26.95 = 1.52 times trailing; Q4 guide 10,250 / 9,115 - 1 = 12.5% above Q3. Memory share of systems revenue: DRAM plus flash 19% + 21% = 40% (FY2021), 17% + 6% = 23% (FY2023), 26% + 7% = 33% (FY2025). Market value 376,360 / 182,232 = 2.07 times the FY2025 year-end value; trailing net income 9,267 / 6,998 - 1 = 32%. Operating income 8,289 / 1,693 = 4.9 times (FY2015-FY2025). P/E gap to Lam 57.7 - 40.9 = 16.8. Q3 FY2026 returns 860 / 3,037 = 28% of operating cash flow. China plus Taiwan nine months (6,688 + 5,902) / 24,037 = 52%. Systems revenue Q1 to Q3 FY2026 7,040 / 5,141 - 1 = 37%. Systems share of segment operating income FY2025 7,379 / (7,379 + 1,792) = 7,379 / 9,171 = 80%. Systems R&D 3,042 / 20,798 = 14.6%. Third quarter share of nine-month systems profit 2,657 / 6,176 = 43%. Services FY2024 6,225 / 5,732 - 1 = 8.6%. Services share of backlog 4,335 / 11,758 = 37% (October 2021). Research per diluted share 1,451 / 1,226 = 1.18 (FY2015) and 3,570 / 808 = 4.42 (FY2025). Net cash plus long-term investments 2,689 + 5,268 = 7,957. Dividends per share 1.78 / 1.22 - 1 = 46%. ROE 35.5% / 10% = 3.5 times - segment shares, margins and growth - segment and company margins, research and tax. — FY2015-FY2026 · publ. September 2026 · source ↗
    Method: Arithmetic on figures reported in Applied Materials' Forms 10-K and 10-Q, results releases and market data; operands shown in the source line.
Sources
Generated September 25, 2026