⚠ A Backlog Customers Can DelayModerate threat

Applied Materials (AMAT) — threat to the moat

Customers can delay or cancel Applied's machine orders before they ship, so a third of the backlog is more hope than contract.

A backlog is a list of promises, and Applied's customers can change theirs. The 10-K is explicit: "Customers may delay delivery of products or cancel orders prior to shipment, subject to possible cancellation penalties"1.

Total backlog, October ($M)11,758202119,011202217,171202315,873202415,0022025Applied Materials Forms 10-K FY2022-FY2025
Down three years in a row from the 2022 peak.

About 31% of the $15,002 million backlog at October 2025 was not expected to be filled within twelve months2. The further out an order is, the more likely it is to move.

The systems backlog has already shown how fast it can shrink, from $12,691 million in October 2022 to $7,105 million in October 202534. Some of that was delivery, and some was customers rescheduling as memory prices fell.

The display part of the backlog has already shown how orders move. Display backlog was $581 million at October 2022, $833 million a year later and $827 million at October 20245, before being folded into Corporate and Other. Screen makers, like chipmakers, place orders when they commit to a factory and delay them when the market softens.

Because Applied does not report backlog quarterly, the first sign of cancellations would be a guidance cut. The fourth-quarter guidance of $10,250 million, plus or minus $500 million6, is the next test; landing below the range would say the orders slipped.

References
  1. ReportedThe 10-K is explicit: "Customers may delay delivery of products or cancel orders prior to shipment, subject to possible cancellation penalties".
    Applied Materials Form 10-K for fiscal 2025 (year ended 26 October 2025) - Item 1A risk factors: competition, export controls, customer concentration, backlog and the EPIC Center. — FY2025 · publ. 12 December 2025 · source ↗
  2. ReportedAbout 31% of the $15,002 million backlog at October 2025 was not expected to be filled within twelve months.
    Applied Materials Form 10-K for fiscal 2025 (year ended 26 October 2025) - backlog by segment. — FY2025 · publ. 12 December 2025 · source ↗
  3. ReportedThe systems backlog has already shown how fast it can shrink, from $12,691 million in October 2022 to $7,105 million in October 2025.
    Applied Materials Form 10-K for fiscal 2024 - four-segment results including Display for FY2022-FY2024, customer concentration naming Samsung and TSMC, backlog at October 2024. — FY2024 · publ. December 2024 · source ↗
  4. ReportedThe systems backlog has already shown how fast it can shrink, from $12,691 million in October 2022 to $7,105 million in October 2025.
    Applied Materials Form 10-K for fiscal 2025 (year ended 26 October 2025) - backlog by segment. — FY2025 · publ. 12 December 2025 · source ↗
  5. ReportedDisplay backlog was $581 million at October 2022, $833 million a year later and $827 million at October 2024, before being folded into Corporate and Other.
    Applied Materials Form 10-K for fiscal 2024 - four-segment results including Display for FY2022-FY2024, customer concentration naming Samsung and TSMC, backlog at October 2024. — FY2024 · publ. December 2024 · source ↗
  6. ReportedThe fourth-quarter guidance of $10,250 million, plus or minus $500 million, is the next test; landing below the range would say the orders slipped.
    Applied Materials third-quarter fiscal 2026 results release, Form 8-K exhibit 99.1 - record revenue, segment results, revenue by geography, employees and fourth-quarter guidance - highlights, income statement, cash flow, quotes and fourth-quarter guidance. — Q3 FY2026 · publ. 13 August 2026 · source ↗
Sources
Generated September 25, 2026