The AI buildout is paying the suppliers: ad, chip and software sellers post strong quarters
AppLovin's net income rose 72%. Coherent's revenue reached $2.37 billion. Qualcomm's car-chip revenue nearly doubled. The quarter's winners are the companies selling the tools, not the ones doing the digging.
- AppLovin reported third-quarter revenue of $2.185 billion, up 55% year over year, and net income of $1.439 billion, up 72%. Self-reported m:…2125
- Coherent reported first-quarter fiscal 2027 revenue of $2.37 billion and non-GAAP diluted EPS of $2.09, and expects fiscal 2027 pro forma revenue growth above 60%. Self-reported m:…1361
- Qualcomm's QCT automotive revenue reached $2 billion in the fourth quarter, up 89% year over year, and the company reiterated a $5 billion fiscal 2027 data-centre revenue target. Self-reported m:…4272
- Snap reported third-quarter revenue of $1,722 million and net income of $56 million, with adjusted EBITDA of $383 million. Self-reported m:…7486
- HubSpot reported third-quarter revenue of $947.6 million, up 17% year over year, with subscription revenue of $930.2 million. Self-reported m:…6062
The suppliers' quarter
The companies selling into the artificial intelligence buildout had a strong quarter. AppLovin reported net income of $1.439 billion, up 72% from a year earlier. Coherent reported revenue of $2.37 billion. Qualcomm's car-chip revenue reached $2 billion, up 89%. Snap reported net income of $56 million. HubSpot grew revenue 17% while rebuilding its product around AI agents. The common thread is not excitement about AI. It is purchase orders, licence renewals and advertising budgets. m:…2125 m:…1361 m:…4272 m:…7486 m:…6062
Advertising pays
AppLovin reported third-quarter revenue of $2.185 billion, up 55% from a year earlier, and net income of $1.439 billion, up 72%. Adjusted EBITDA was $1.842 billion, up 59%, and free cash flow was $1.4 billion. The board approved a $3.2 billion increase to the share repurchase authorisation, taking the total to $3.6 billion, after the company repurchased 4.1 million shares for $1.4 billion in the quarter. The company projects fourth-quarter revenue of $2.365 billion to $2.395 billion. m:…2125
Snap reported third-quarter revenue of $1,722 million and net income of $56 million, with adjusted EBITDA of $383 million and free cash flow of $164 million. Evan Spiegel said AI is becoming a significant advantage for the company's advertising platform. HubSpot reported total revenue of $947.6 million, up 17%, with subscription revenue of $930.2 million, up 18%, and non-GAAP operating income of $214.2 million, up 33%. Its customer count reached 311,704, up 12%. Yamini Rangan said the company is transforming its product, pricing and go-to-market strategy to lead in the era of AI agents. m:…7486 m:…6062
Chips and photonics
Qualcomm reported fourth-quarter fiscal 2026 revenue of $10.322 billion and non-GAAP earnings of $2.17 a share. The company renewed long-term licence agreements with Apple, Huawei and Transsion, and announced a multi-generational product collaboration with Amazon for AI data centres. Car-chip revenue reached $2 billion in the quarter, up 89% from a year earlier, and the company reiterated its fiscal 2027 data-centre revenue target of $5 billion. It projects first-quarter fiscal 2027 revenue of $10.4 billion to $11.2 billion. m:…4272
Coherent reported first-quarter fiscal 2027 revenue of $2.37 billion and non-GAAP earnings of $2.09 a share, and expects second-quarter revenue of $2.55 billion to $2.75 billion. The company expects fiscal 2027 pro forma revenue growth above 60% and targets a non-GAAP gross margin above 45% before the end of calendar 2028. Jim Anderson said AI datacentre transitions are driving demand for its photonics platform. Sherri Luther attributed the quarter's margin expansion to pricing optimisation and cost improvements. m:…1361
What it adds up to
None of these companies is selling the same thing, and that is the point. AppLovin and Snap sell advertising improved by AI. HubSpot sells software rebuilt around AI agents. Qualcomm sells chips for cars and data centres. Coherent sells the photonics that connect data centres. The quarter's winners are spread across the stack, and each of them can point to a number that moved, not a forecast. m:…2125 m:…7486 m:…6062 m:…4272 m:…1361
The question is durability. AppLovin is guiding to a fourth quarter larger than its third. Coherent is guiding to a second quarter larger than its first. Qualcomm has a $5 billion data-centre target for fiscal 2027. Guidance is not delivery, and the next two quarters will show whether the buildout keeps paying the suppliers at this pace. m:…2125 m:…1361 m:…4272
What is still unresolved
- Whether AppLovin's advertising growth can sustain a 72% rise in net income into the fourth quarter.
- The financial terms of Qualcomm's renewed licence agreements, which the company did not disclose.
- Whether HubSpot's shift to AI agents converts its larger customer base into faster subscription growth.
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