Is Applied Materials Still The Business You Bought? - Trefis

Applied Materials’ AMAT Applied Global Services (“AGS”) is growing alongside fab utilization and the need to improve output, yield and ramp speed. AMAT’s third-quarter fiscal 2026 revenues reached a record $1.78 billion, up 22% year over year, while non-GAAP operating margin rose to 30.1% from 27.3%. More than 37,000 chambers are connected to AIx software for monitoring, diagnostics and predictive analytics. AMAT’s AGS business also benefits from the doubling of its manufacturing space over the past several years. AMAT plans to double quarterly system output from current levels by 2028. AMAT added more than 1,500 manufacturing and AGS support employees in the third quarter of fiscal 2026 and is planning further capacity for demand through 2030. This visibility can improve supply-chain readiness and execution across customer ramps. Applied Materials' recurring AGS revenues, more than 37,000 AIx-connected chambers and value-based pricing provide operating support for that durability. AGS is becoming an important part of Applied Materials’ long-term earnings model.

If you hold Salesforce (CRM), you likely bought into a subscription software provider known for steady growth and reliable cash generation. During its fiscal Q2 2027 earnings call in August, management noted that a $25 billion accelerated share repurchase was still under way. Has a buyback of that size changed the company behind your shares? While the core software operation looks much as it did a year ago, the underlying balance sheet looks starkly different. Debt accounted for 38.1% of the company’s assets during fiscal Q2 2027, the latest reported quarter. For the fourteen years prior to the past year, that metric typically sat around 14.8%. In absolute terms, Salesforce held total debt of $41.7 billion at the end of the quarter. That compares with just $11.4 billion in cash and short-term investments.

Last year, employees at Spotify built HR Bot, a program that serves as a personalized HR help desk. Companies big and small are embracing a DIY approach to software. With the help of AI, they're building tools that they could otherwise purchase from large enterprise software vendors like Workday, SAP, and Salesforce. West Monroe, a Chicago-based consultancy, wanted a program that could check payroll for errors and another that could surface useful insights for managers about its roughly 2,000 employees. Buying those capabilities from a vendor would have cost the company more than $300,000 a year, Tanya Moore, its chief people officer, estimated. To avoid that expense, employees built the software themselves earlier this year using OpenAI's ChatGPT and Codex, she said. For employers seeking custom internal tools, the options used to be limited: Buy from a vendor or keep doing the work manually. Generative AI has created a third option.