Better Semiconductor Equipment Stock: Applied Materials vs. Lam Research
The chipmaking equipment boom has supercharged growth for both companies, and their prospects suggest further upside in their stock prices.
Semiconductor equipment demand has surged in recent years, primarily due to the growing demand for artificial intelligence (AI) chips. This surge has benefited shares of Lam Research (NASDAQ: LRCX) and Applied Materials (NASDAQ: AMAT), both of which have experienced significant growth this year. While Lam stock has climbed 84% in 2026, Applied Materials has outperformed with an 89% increase.
However, both semiconductor stocks have recently experienced a pullback over the past three months. Lam's stock has declined by 27% since its 52-week high on June 30, while Applied Materials has also slipped, losing nearly a third of its value since reaching its 52-week high on the same date.
Investors looking for an opportunity may want to consider the recent slide in these stocks as a potential buying chance. Industry association SEMI estimates that sales of semiconductor manufacturing equipment are projected to increase by 23% in 2026, reaching $166 billion. Furthermore, spending on semiconductor manufacturing equipment is expected to rise to $201 billion in 2027 and $229.5 billion in 2028.
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