Applied Materials Falls 4%, Lam Research and Teradyne Sink 5%: What’s Prompting the Selloff in Chip Equipment Stocks?

David Moadel

Wed, August 19, 2026 at 8:14 PM GMT+3 4 min read

Quick Read

Applied Materials and Lam Research fell between 4 and 5% Wednesday despite dropping Treasury yields, signaling AI capex repricing rather than a rate-driven selloff.
SOXX's 77% YTD gain masks equipment-specific stress because its blended holdings dilute the pressure hitting pure-play names like KLA, down 4%.
Anthropic's $65B annualized run rate and 2028 revenue projection of $190 to $200B landed below investor expectations, shaking confidence in locked-in AI infrastructure spending.
Act now: the analyst who called NVIDIA in 2010 just named his top 10 AI stocks — and Applied Materials didn't make the cut. Grab the names FREE today.

Applied Materials (NASDAQ:AMAT) shares are down 4% to $494.82 in midday trading Wednesday, extending a second straight session of heavy selling across chip equipment names. The company's stock is still up 101% year to date through Tuesday's close year to date (YTD), so today's decline sits inside an enormous run rather than reversing it.

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The pullback is concentrated in the picks-and-shovels group that led the AI infrastructure trade this year. The chipmakers get the headlines, but the buildout also runs through power, cooling, and networking suppliers we profiled in a free report here: 7 Stocks Powering the AI Boom (That Aren't Chipmakers).

What makes today unusual is the backdrop. Long-end Treasury yields fell hard on Treasury Department plans to at least double buybacks of 10-year to 30-year debt, and that relief normally lifts high-multiple growth names. Equipment stocks selling into that tailwind points to AI capex repricing rather than a rates problem.

AI Capex Durability Comes Under Scrutiny

The trigger is a sharper debate over how much AI infrastructure spending is actually locked in. The Wall Street Journal reported that nine top tech companies carry roughly $3 trillion of off-balance-sheet commitments mostly tied to AI, growing faster than traditional capital expenditures that totaled about $600 billion over the past year. Those obligations were about triple what those companies owe under outstanding leases and long-term borrowings.

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Model economics added to the anxiety. Anthropic told investors its annualized revenue run rate reached $65 billion at the end of July, and OpenAI's run rate recently reached $40 billion. Both figures landed below expectations circulating among investors.

Reuters reported that Anthropic is projecting 2028 revenue of $190 billion to $200 billion, a figure that also sits below some investor projections. Applied Materials and its peers sit at the front line of that repricing because their order books are the most direct expression of AI capex, so any doubt reaches equipment names before it reaches chip designers.

Peer Equipment Names Extend the Slide

Lam Research (NASDAQ:LRCX) shares are down 5% to $309.94, the deepest single-day drop in the group. The company's stock was up 92% year to date through Tuesday's close, and CEO Tim Archer told investors last month that "AI is driving unprecedented demand, greater technical requirements, and accelerated architectural scaling at both the device and packaging level."

Meanwhile, KLA Corporation (NASDAQ:KLAC) shares are down 4% to $187.92, with the process-control leader tracking the group lower. The company's stock is up 61% year to date through Tuesday's close, the smallest YTD gain in the cohort and consistent with a name that already carried China export-control overhang.

Furthermore, Teradyne (NASDAQ:TER) shares are down 5% to $384.26, and Teradyne stock is up 109% year to date through Tuesday's close, the largest YTD run in the group. That leadership on the way up is working against the stock today as recent positioning unwinds.

The iShares Semiconductor ETF Softens the Sector Read

For a broader context, the iShares Semiconductor ETF (NASDAQ:SOXX) trades at $522.49 and is up 77% year to date through Tuesday's close. The fund is a broad semiconductor benchmark rather than a pure chip-equipment vehicle.

Its holdings blend chip designers, manufacturers, and equipment suppliers, which dilutes equipment-specific moves and helps explain why the iShares Semiconductor ETF sits between the 61% YTD gain of KLA Corporation and the 109% YTD gain of Teradyne. Traders reading the fund as a proxy for equipment stress should keep that concentration profile in mind.

What to Watch Now

The split between index-level gains and equipment weakness tells the story cleanly. The Dow Jones Industrial Average gained 0.23% and the S&P 500 gained 0.32%, while the NASDAQ 100 edged just above the flat line on chip weakness. The 10-year Treasury yield fell 5 basis points to 4.65% and the 30-year yield declined 8 basis points to 5.2%.

Traders can watch for incremental commentary from hyperscalers on 2027 capital plans, since that is the most direct offset to the AI capex durability concerns hitting Applied Materials, Lam Research, KLA Corporation, and Teradyne today. Position sizing matters more than direction here given how much year-to-date gain is still embedded in these names.