Applied Materials (Applied Materials (AMAT)) just dropped its fiscal third-quarter numbers, and they're pretty darn good. The chip equipment maker reported revenue of $9.12 billion, beating the $8.99 billion analysts were looking for. Adjusted earnings came in at $3.50 per share, also ahead of the $3.40 consensus. Not bad for a Thursday afternoon.

Revenue was up 25% year-over-year, and gross margin hit 50.3% (50.4% adjusted). The company also generated $3.04 billion in cash from operations and returned $860 million to shareholders through buybacks and dividends. It ended the quarter with about $7.04 billion in cash on hand.

CEO Gary Dickerson was clearly pleased, calling it "another record-breaking quarter, including the highest sequential revenue growth in the company's history." He attributed the strength to AI: "As the rapid global adoption of AI drives unprecedented demand for our materials engineering solutions, we are further raising our Semiconductor Systems revenue expectations for calendar 2026 and are confident we will grow faster than the market this year."

Looking ahead, Applied Materials guided for fourth-quarter revenue of $10.25 billion, plus or minus $500 million, versus the $9.54 billion analysts had penciled in. Adjusted EPS is expected to be between $3.82 and $4.22, compared to the $3.69 estimate. The company also said it expects "another strong growth year" in 2027, citing better demand visibility from customers.

So why did shares dip 3.14% in after-hours trading to $517.78? Well, the stock is up nearly 100% year-to-date, so some profit-taking after a big run isn't shocking. It's the classic "good news, but already priced in" scenario. Management will discuss the quarter on an earnings call at 4:30 p.m. ET.

For investors, the takeaway is clear: AI is fueling a massive boom in chipmaking equipment, and Applied Materials is right in the middle of it. The guidance suggests the party isn't over yet.