Applied Materials, Inc. (AMAT) stock traded mostly flat in Friday's premarket session after the semiconductor equipment maker reported strong fourth-quarter results and highlighted surging artificial intelligence demand.

Applied Materials expects global cloud capital spending to surge more than 50% in 2027, exceeding $1 trillion. Management said the rapid expansion of AI infrastructure is fueling demand for advanced chips and semiconductor manufacturing equipment, positioning the company for another record year.

Applied Materials said its monthly AI token consumption grew more than 50-fold in 2026 as employees expanded their use of AI tools, with further growth expected in 2027.

Earnings Beat Wall Street Estimates

Applied Materials reported fourth-quarter revenue of $10.41 billion, beating analysts' estimate of $10.30 billion. Adjusted earnings of $4.16 per share topped expectations of $4.05.

For the first quarter of fiscal 2027, Applied Materials expects revenue of $11.1 billion, plus or minus $500 million, above analysts' estimate of $10.89 billion. Adjusted earnings are expected to range from $4.15 to $4.55 per share, compared with the $4.26 estimate.

Semiconductor Systems revenue is expected to rise 69% to about $8.7 billion, while Applied Global Services revenue is projected to grow 28% to a record $2 billion.

AI Boom Fuels Semiconductor Demand

Applied Materials expects the wafer fabrication equipment (WFE) market to grow more than 30% in 2027. Demand for advanced chips, high-bandwidth memory and sophisticated packaging technology is driving growth.

The company expects Semiconductor Systems revenue to increase more than 40% in calendar 2026. Applied Materials expects advanced packaging revenue to grow about 90% in calendar 2026, while inspection and metrology revenue is on track to increase more than 50%.

Management said customers are requesting faster production and earlier equipment deliveries as demand outpaces supply in key semiconductor markets.

China Outlook and Long-Term Growth

Applied Materials expects China revenue to increase in fiscal 2027, although shipments to the region will probably account for less than 25% of its business. The company also expects continued market-share gains, stronger margins and improved operating efficiency.

Its long-term goals include gaining more than 2 percentage points of WFE market share by 2030.

AMAT Stock Price Activity: Applied Materials shares were down 0.09% at $380.59 during premarket trading on Friday, according to market data.