Applied Materials Deepens Its Besi Bet Before a Crucial Earnings Test

Applied Materials plans to increase its ownership of BE Semiconductor Industries to about 20%, roughly doubling a position that began in 2025. The investment puts more capital behind hybrid bonding and advanced packaging just as artificial-intelligence systems demand denser, more energy-efficient connections between chips.

The transaction is an accelerated share purchase subject to U.S. antitrust clearance. Applied Materials said it does not intend to increase the stake beyond about 20% or seek a Besi board seat. That structure makes the deal a long-term strategic investment rather than a step toward operational control.

The industrial case is supported by Besi's latest orders. Third-quarter orders reached 342.6 million euros, up 96.1% from a year earlier and 17% from the second quarter. Besi also said hybrid-bonding orders in the first nine months of 2026 more than doubled the total for all of 2025. Those bookings are evidence of demand, but they still need to convert into shipments and revenue.

Applied Materials has its own momentum to protect. Fiscal third-quarter revenue rose 25% from a year earlier to a record $9.12 billion. GAAP earnings were $3.17 per share, while non-GAAP earnings were $3.50. For the fiscal fourth quarter, management guided to revenue of $10.25 billion, plus or minus $500 million, and non-GAAP earnings of $4.02 per share, plus or minus $0.20.

The original report attributed a sharp stock decline to a broader semiconductor selloff and concern that AI spending could peak before the current growth reaches 2027. That market reaction should not be confused with a deterioration already visible in Applied's reported results. The more useful test is whether November 12 results land near the company's guidance and whether management sees advanced packaging demand carrying into the next fiscal year.

Geographic exposure is another constraint. China generated $2.51 billion, or 28% of total fiscal third-quarter revenue, according to Applied's official release. Export controls and customer spending shifts can change that contribution quickly. Strong DRAM and high-bandwidth-memory investment may offset some pressure, but it does not remove policy risk.

The Besi stake gives Applied Materials more economic exposure to a technology it already helps develop, without paying for control. That can create upside if hybrid bonding becomes a standard step in AI chip production. It can also produce mark-to-market volatility if equipment orders slow. Investors should separate the strategic value of the partnership from the much larger question of whether Applied can sustain record core revenue and margins.