Applied Materials‘ AMAT operating cash flow declined to $845 million from $1.686 billion in the prior quarter, and free cash flow declined to $210 million from $1.04 billion in the prior quarter in the second quarter of fiscal 2026. AMAT’s expanding manufacturing capacity and strengthening supply chain readiness can be a probable reason.

AMAT is investing in building plans, inventory positions and logistics capacity to ensure it can meet accelerating customer demand. Customers are providing longer-term demand forecasts, allowing Applied Materials to prepare manufacturing resources well in advance and support expected industry growth through 2027 and beyond.

Applied Materials is seeing AI adoption broaden and diversify, which is pushing…