Lam Research (LRCX), KLA (KLAC) and Applied Materials (AMAT) Shares Slide: What Happened

What happened

Shares of the companies that build chipmaking machines slid on Thursday after Lam Research (LRCX) said its forecast would have been higher if not for supply shortages. Lam plunged 11.8%, KLA (KLAC) 9.5% and Applied Materials (AMAT) 8.2%. ASML (ASML), another maker of chipmaking machines, slid 6.9%.

Lam reported record quarterly revenue of $8.22 billion on Wednesday and forecast $8.60 billion, plus or minus $400 million, for the quarter ending in December, according to its results release. Finance chief Doug Bettinger said on the earnings call that the forecast “would have been a bit higher if not for some near-term supply chain constraints.”

“As we move into calendar year 2027, we see clean room space availability and supply chain constraints for certain components continuing to limit chip makers and equipment companies’ ability to fully meet end demand,” Chief Executive Tim Archer said on the call.

Lam’s shares closed at $230.15, down 11.8% from the previous close. KLA closed at $147.83 and Applied Materials at $375.58.

Why it matters

A clean room is the dust-free space inside a chip factory where these machines are installed. If chipmakers run short of that space and of certain parts, they can’t add equipment as fast as they would like, however strong demand is. For the toolmakers, that means growth arrives later than investors had priced in.

The warning landed on a day when investors were already nervous about how the AI build-out gets paid for. Nvidia (NVDA) Chief Executive Jensen Huang told CNBC that the growth of neoclouds, companies that buy Nvidia chips and rent them out, is limited because “there’s a scarcity of capital.” The PHLX Semiconductor index, which tracks 30 big chip companies, sank 6.72%, its worst day since 23 June.

What the market is telling us

Lam Research’s shares moved 5% or more on 53 of the last 252 sessions. The stock is up 34.5% this year, and at $230.15 it sits 46.9% below its 52-week closing high of $433.33 from 30 June 2026. No one-day drop this large appears in our price history, which starts in October 2021; the closest was an 11.6% fall on 3 April 2025.

Our view: Lam described a delay, not a collapse in demand, but with the stock already down by almost half since June, the next leg depends on how quickly chipmakers can find room for the machines.