Better Semiconductor Equipment Stock: Applied Materials vs. Lam Research
Key PointsLam Research and Applied Materials manufacture semiconductor manufacturing equipment, and their growth rates have accelerated as a result.
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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