New York, January 30, 2026, 11:04 a.m. EST — Regular session
Lam Research shares dropped 2.3% to $242.35 by mid-morning on Friday, after climbing earlier to $251.90. KLA slid roughly 11.7%, while Applied Materials lost around 2.2% as chip-equipment stocks cooled off.
This week’s outlook from Lam shifted the mood for a group seen as a real-time gauge on chipmaking investment linked to artificial intelligence. When this sector shifts, it often does so abruptly.
The timing couldn’t be worse for bulls: Lam posted a strong quarter and guidance that would normally fuel momentum buying. Yet Friday’s sell-off indicates some investors are cashing out despite that.
Lam late Wednesday projected third-quarter revenue of $5.7 billion, plus or minus $300 million, and adjusted earnings of $1.35 per share, plus or minus 10 cents—both beating Wall Street’s forecasts. For the December quarter, it reported revenue of $5.34 billion and adjusted earnings of $1.27 per share, again topping expectations. Shares jumped 3.2% in after-hours trading following the announcement. CEO Tim Archer commented, “Entering 2026, our expanding product and services portfolio is enabling the market’s transition to smaller, more complex three-dimensional devices and packages.” 1
Lam highlighted its stake in memory chips, noting strong demand for high-bandwidth memory — the stacked kind paired with AI processors — as systems hungry for data continue to grow.
A quarterly filing revealed China stayed Lam’s biggest market in the December quarter, generating roughly $1.86 billion in revenue, surpassing both Taiwan and Korea. It also showed that foundry clients—contract chipmakers—made up 59% of leading-edge and upgrade sales during the period, with memory representing 34%. 2
The broader market followed KLA’s lead after the chipmaker topped estimates, though its shares slipped in after-hours trading. “KLA’s March quarter results suggest steady growth, not the kind of accelerating momentum investors might have hoped for,” noted Michael Ashley Schulman, CIO at Running Point Capital Advisors. 3
Wafer fabrication equipment refers to the massive machines that etch, deposit, and clean layers on silicon wafers. Traders frequently track demand for this gear as a stand-in for chipmakers’ investment in new capacity.
The setup isn’t straightforward. Tool shipments could face sudden hits from China exposure and changing export rules, while the stock’s recent surge leaves little margin for missteps or a slowdown in memory orders.
Up next is Lam’s own checkpoint. The company forecasted results for the quarter ending March 29, 2026, with investors keen to see if AI-driven demand continues to accelerate tool orders. The March-quarter report will be closely watched for signs of that. 4
