Applied Materials vs. Intel: Which AI Stock Has Better Revenue Growth?

Applied Materials (AMAT) and Intel (INTC) both reported their latest quarterly results, revealing divergent paths in the AI-driven semiconductor landscape. Applied Materials, a key supplier of chip fabrication equipment, posted record revenue of $9.1 billion for its fiscal Q3 ended July 26, 2026, a 25% year-over-year increase. This marked the company's third consecutive quarter of sequential growth, driven by strong demand for its advanced manufacturing solutions. AMAT also reported a robust 34% operating margin and a 43% jump in net income to $2.5 billion.

Intel, on the other hand, reported $16.1 billion in revenue for its fiscal Q2 ended June 27, 2026, also up 25% year-over-year. However, the company swung to a substantial net loss of $10.8 billion, primarily due to a non-cash accounting charge related to shares owed to the U.S. government under the CHIPS Act. Intel's operating margin stood at just 12%, reflecting ongoing profitability challenges despite the revenue gain.

The contrasting results highlight the different roles these companies play in the AI ecosystem. Applied Materials benefits from selling the picks and shovels—the equipment needed to make advanced AI chips—while Intel is trying to regain its footing as a chip manufacturer under new CEO Lip-Bu Tan, who took over in 2025.

Both companies struggled with year-over-year revenue declines in some quarters of 2025, but their 2026 trajectories have improved significantly. Applied Materials has accelerated its growth, while Intel is stabilizing its top line but still faces significant bottom-line issues.

Investors are now weighing whether AMAT's momentum can continue and whether Intel's turnaround will eventually translate into sustainable profits.

For investors, the divergence in profitability between Applied Materials and Intel is crucial. AMAT's ability to grow revenue while expanding margins and net income demonstrates strong operational execution and pricing power. As AI demand continues to drive demand for advanced chips, AMAT is well-positioned to benefit from increased capital spending by chipmakers. Its record revenue and healthy margins suggest that the company is capitalizing on the AI boom more effectively than Intel.

Intel's revenue growth is a positive sign that its turnaround efforts are gaining traction, but the massive net loss raises questions about its cost structure and future profitability. The CHIPS Act charge is a one-time accounting item, but even excluding it, Intel's 12% operating margin lags far behind AMAT's 34%. This suggests that Intel still faces significant challenges in manufacturing efficiency and competitiveness.

Moreover, Intel's ability to compete in the AI chip market remains uncertain. While it produces CPUs and GPUs, it has yet to establish a strong presence in AI accelerators, a market dominated by Nvidia. Applied Materials, by contrast, supplies equipment to all major chipmakers, making it a more diversified play on AI growth.

The stock market has reacted accordingly: AMAT shares rose 6.51% on the news, while Intel's stock dipped slightly by 0.18%. This indicates that investors are rewarding AMAT's strong execution and punishing Intel's continued losses.

Looking ahead, AMAT's growth trajectory appears more sustainable, while Intel's turnaround will require further proof of profitability. For investors seeking exposure to AI, AMAT may offer a more reliable path to gains.