Applied Materials

Revenue hit a record 9.12 billion dollars last quarter, up 25 percent from a year earlier, while profit per share jumped 41 percent. Management guided the current quarter to 10.25 billion dollars, which would be roughly 51 percent above the same quarter last year. A year ago revenue was actually shrinking, so this is a genuine turn rather than more of the same.

Gross margin has expanded for 13 straight quarters and now sits at 50.4 percent, with operating margin reaching 34 percent. Applied is keeping more of every dollar it sells even while scaling up fast, which is rare. The company also produced a record 3.04 billion dollars of cash from operations last quarter and handed 860 million dollars back to shareholders.

The stock trades near 39 times forward earnings after more than doubling in 2026, so a lot of good news is already baked into the price. This is also a deeply cyclical business: just four quarters ago revenue was falling 3 percent year over year and management was warning about weak visibility. If chip customers delay orders, earnings and the multiple investors pay can fall at the same time.

Two customers alone accounted for about 20 percent and 14 percent of revenue last quarter, so roughly a third of the business rests on two relationships. China is another 28 percent of revenue, and Applied paid a 253 million dollar settlement with US export regulators over China shipments. A change in trade rules could remove a large block of sales quickly.