New York, January 30, 2026, 12:31 PM EST — Regular session
- Shares of Applied Materials dropped roughly 3% amid a broad sell-off in chip-equipment stocks.
- KLA plunged over 12%, pulling its peers down with it.
- Investors are zeroing in on the upcoming earnings reports to get a better handle on 2026 wafer-fab spending.
Applied Materials (AMAT) dropped 3.1% to $330.76 during midday trading Friday, deepening losses across chipmaking-tool shares.
This shift is crucial as investors pin their hopes on earnings season to gauge wafer fabrication equipment spending — the capital chipmakers allocate for the machinery that crafts chips on silicon wafers.
Spending on data center expansions and AI chips has long been a cornerstone trade. So when a major supplier falters, the ripple effects hit fast—and often hard.
KLA shares tumbled 12.8%, with Lam Research sliding 2.3% and ASML down 1.4%. The VanEck Semiconductor ETF and iShares Semiconductor ETF both dropped roughly 2% to 2.5%, dragging the S&P 500 ETF and Nasdaq 100 tracker lower as well.
KLA reported earnings late Thursday that beat Wall Street estimates and projected March-quarter results above consensus. Still, the stock slipped after the announcement. “The stock had already sprinted into the print,” noted Michael Ashley Schulman of Running Point Capital Advisors, who described the outlook as “steady growth rather than renewed acceleration.” 1
Lam’s update earlier this week outperformed forecasts, buoyed by a strong outlook. “Entering 2026, our expanding product and services portfolio is enabling the market’s transition to smaller, more complex three-dimensional devices and packages,” CEO Tim Archer said. 2
In Europe, ASML reported record fourth-quarter orders and raised its 2026 sales forecast, despite analysts questioning if it can keep up with demand. The company also announced job cuts. CEO Christophe Fouquet said they aim to “boost… our engineering capability, our innovation engine,” after years dealing with increasing complexity. 3
Applied Materials filed its annual proxy this week, scheduling the shareholder meeting for March 12 in Santa Clara, California. The document covers votes on directors, an advisory “say-on-pay” proposal, and auditor ratification for KPMG LLP. It also spotlighted progress on the EPIC Center project in Silicon Valley, expected to start operations in 2026. 4
Traders are shifting focus from proxy paperwork to the next big trigger: earnings and guidance. The key issue—will demand for foundry and logic (contract chipmaking and processor production) plus memory hold up after the recent surge in the sector?
The setup isn’t straightforward. Zacks pointed out this week that Applied Materials has outperformed its semiconductor peers over the last six months, but it also highlighted export restrictions, tensions with China, a sluggish memory market recovery, and rising costs as significant risks that could hit hard when expectations run high. 5
If the sector sticks to “steady” growth instead of faster gains, investors might continue pulling back with every report. Policy risks linger, too—U.S. restrictions on advanced tech exports to China remain a key wild card for tool demand.
Applied Materials is set to release its fiscal first-quarter results on Feb. 12. Investors will be watching closely for updates on the company’s outlook and any shifts in customer spending plans through the remainder of 2026. 6
