Lam Research slides 6.9% as chip equipment selloff deepens

Lam Research shares fell 6.9 percent to $326.13 on Tuesday, leading a selloff in semiconductor equipment stocks as investors rotated from chipmakers ahead of earnings season.

The decline extended a sector-wide pullback that began in Asia, where Samsung Electronics dropped 7 percent despite reporting a 19-fold increase in second-quarter operating profit, according to company filings. Investors focused on spending concerns and elevated valuations after the stock's strong rally, rather than the earnings beat. The Kospi index fell nearly 5 percent, triggering a circuit breaker.

Memory-chip stocks led the declines in US trading. Micron Technology lost 6.9 percent, while KLA, Marvell Technology, Broadcom and Advanced Micro Devices also traded lower. Western Digital dropped more than 6 percent and SanDisk fell 8 percent as profit-taking accelerated. Nvidia declined 1.4 percent after a Reuters report that Chinese startup DeepSeek is developing its own artificial intelligence chip, a move that could reduce its reliance on Nvidia and Samsung.

European chip stocks followed the selloff, with ASML and Infineon each declining about 4 percent. The STOXX 600 technology sector fell 1.6 percent, the weakest performer on the index. Samsung's weakness spread to SK Hynix, which is scheduled to begin trading on the Nasdaq later this week.

The rotation out of chip stocks comes as the second-quarter earnings season approaches, testing whether AI-related companies can justify valuations that have outpaced profit growth. The Nasdaq Composite fell 0.7 percent while the Dow Jones Industrial Average gained 160 points, closing above 53,000 for the first time, reflecting a shift toward software and defensive names. Traders are pricing in at least one 25-basis-point interest rate increase before year-end, according to LSEG data. The Federal Reserve's latest meeting minutes are due Wednesday.

For Lam Research, the selloff adds pressure on a stock tied to AI-driven expansion in wafer fabrication equipment spending. Any softening in memory-chip demand could directly affect orders for its etch and deposition tools, which are critical to advanced node production. The company's next earnings report will offer a clearer view of whether equipment spending remains on track.

This article is for informational purposes only and does not constitute investment advice.