Chip equipment stocks fall 5% as AI capex durability questioned

Chip equipment stocks fell as much as 5 percent Wednesday as investors questioned whether $3 trillion in AI commitments will hold.

Applied Materials shares fell 4 percent to $494.82 Wednesday, extending a second straight session of selling across chip equipment makers as investors questioned the durability of AI infrastructure spending.

"AI is driving unprecedented demand, greater technical requirements, and accelerated architectural scaling at both the device and packaging level," Tim Archer, chief executive officer at Lam Research, said last month.

Lam Research shares fell 5 percent to $309.94, KLA Corporation dropped 4 percent to $187.92, and Teradyne sank 5 percent to $384.26. The Wall Street Journal reported nine top tech companies carry roughly $3 trillion in off-balance-sheet commitments mostly tied to AI, growing faster than the $600 billion in traditional capital expenditures they reported over the past year.

Anthropic told investors its annualized revenue run rate reached $65 billion at the end of July, and OpenAI's run rate reached $40 billion, both below expectations circulating among investors. Reuters reported Anthropic projects 2028 revenue of $190 billion to $200 billion, also below some investor projections. Equipment makers sit at the front line of any repricing because their order books are the most direct expression of AI capex.

What Makes the Session Unusual

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

The iShares Semiconductor ETF (NASDAQ:SOXX) trades at $522.49, up 77 percent year to date. The fund blends chip designers, manufacturers, and equipment suppliers, which dilutes equipment-specific moves and explains why it sits between KLA's 61 percent YTD gain and Teradyne's 109 percent YTD run. Traders reading the fund as a proxy for equipment stress should keep that concentration profile in mind.

The year-to-date gains remain enormous even after the pullback. Applied Materials is up 101 percent through Tuesday's close, Lam Research up 92 percent, and Teradyne up 109 percent. ASML Holding, the lithography leader, has climbed 67 percent this year to $1,883.12, while the VanEck Semiconductor ETF (NASDAQ:SMH) is up 56 percent. The gap versus the Invesco QQQ Trust, up 17 percent, shows how much of 2026's tech leadership came from semiconductors specifically rather than mega-cap tech broadly.

What to Watch

The split between index-level gains and equipment weakness tells the story cleanly. The Dow Jones Industrial Average gained 0.23 percent and the S&P 500 gained 0.32 percent, 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 percent and the 30-year yield declined 8 basis points to 5.2 percent.

Analyst caution has built alongside the rally. Erste Group downgraded Lam Research citing risks of declining gross and operating margins, with management forecasting a slight gross margin decline for the current quarter. Analysts covering the stock carry an average price target of $313.63, a high of $385, and a low of $213, according to TradingKey data.

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

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