Applied Materials reported record quarterly revenue of $10.41 billion on Thursday, beating Wall Street expectations as spending on the equipment that makes advanced artificial intelligence chips surged.

The semiconductor equipment maker said revenue for its fiscal fourth quarter, which ended October 25, rose 53 percent from $6.80 billion a year earlier, topping the $10.30 billion average estimate compiled by analysts. Adjusted earnings per share were $4.16, up 92 percent from $2.17 a year earlier and above the $4.06 analysts expected.

On a generally accepted accounting principles basis, Applied Materials reported net income of $2.72 billion, up 43 percent, or $3.40 per share, compared with $2.38 a year earlier. The GAAP result was held back by a $653 million unrealized loss on strategic investments. Non-GAAP gross margin reached 50.6 percent, up 250 basis points from 48.1 percent a year earlier.

The company's Semiconductor Systems division, which sells the machines chipmakers use to build advanced processors, generated $7.996 billion in quarterly revenue, up 64 percent from $4.879 billion a year earlier, as chipmakers increased equipment spending to meet demand for chips used in AI data centers.

For the full fiscal year, Applied Materials posted record revenue of $34.45 billion, up 21 percent, with record non-GAAP earnings per share of $12.89. GAAP earnings per share for the year were $12.62.

The company forecast first-quarter fiscal 2027 revenue of about $11.10 billion, plus or minus $500 million, and adjusted earnings of $4.35 per share, plus or minus 20 cents — both above Wall Street estimates. The outlook signals that the AI equipment boom is carrying into the new fiscal year.

Applied Materials returned $2.42 billion to shareholders in the quarter, including $2.00 billion in share repurchases — its largest quarterly buyback in more than eight years — and $421 million in dividends. Cash from operations was $3.30 billion.

Shares fell 3.6 percent to $380.95 in regular trading on Thursday before the results were released, then steadied in after-hours trading. The results land as AI infrastructure spending keeps climbing across the chip supply chain, with Nvidia's earnings on November 17 offering the next read on demand for AI chips.