Applied Materials Jumps 11% Ahead of Earnings; Lam Research Surges 9%, ASML Rises 6%

Chipmaking equipment stocks are rallying hard, and one bellwether is leading the group ahead of its next earnings report. Applied Materials (NASDAQ:AMAT | AMAT Price Prediction) stock is at $370.81, up 11%, in afternoon trading. That jump comes as traders position for the company’s next read on wafer fabrication equipment (WFE) spending, which covers the tools chipmakers buy to deposit, etch, pattern and inspect circuits on silicon wafers.

Broader markets are also giving Applied Materials a lift. Major indexes are higher as investors return to artificial intelligence (AI) shares after last week’s post-midterm selloff, though NVIDIA (NASDAQ:NVDA) stock is lower on company-specific news. These suppliers rarely get the same attention. The AI expansion driving this equipment cycle also runs on power, cooling, and networking suppliers (we rounded up seven of them in a free report on the picks-and-shovels side of the AI boom).

Applied Materials Earnings Could Set the Tone for 2027

Applied Materials has said it’ll report Q4 FY2026 results on November 12. Management at Applied Materials guided to revenue of $10.25 billion, plus or minus $500 million, and non-GAAP earnings per share (EPS) of $4.02, plus or minus 20 cents. Analyst consensus calls for EPS of $4.06 on revenue of $10.30 billion, which would mean year over year (YoY) growth of 87.1% and 51.4%, respectively.

On its August 13 call, Applied Materials stated leading-edge foundry-logic, dynamic random-access memory (DRAM) and advanced packaging should drive the bulk of WFE growth in 2026 and 2027. CEO Gary Dickerson noted: “Those are the fastest growing parts of the market, and those are areas where we have clear leadership and are very well positioned going forward.” Record DRAM revenue at Applied Materials, including high-bandwidth memory (HBM) packaging, grew 52% YoY in Q3 FY2026.

Lam Research and ASML Follow Applied Materials Higher

Lam Research (NASDAQ:LRCX) stock is trading at $218.75, up 9%. A rebound that began in the prior session continues, after Lam Research announced a $25 billion share repurchase authorization on November 5, on top of a $3 billion balance remaining from its prior authorization. That buyback followed a sharp drop in Lam Research stock after its October 21 report, when management said supply constraints would limit revenue.

During that call, Lam Research forecast WFE spending in the mid-$150 billion range for 2026 and more than $200 billion in 2027. Those projections frame the opportunity for Applied Materials, too, since both companies sell into the same fab build-outs.

Meanwhile, ASML (NASDAQ:ASML) stock is at $1,514.45, up 6%, rising with the group. Back on October 14, ASML raised its full-year 2026 sales outlook to between €44 billion and €45 billion after its Q3 2026 sales topped estimates as AI demand stretched its capacity. Customers have told the Dutch lithography leader that demand for their products will outpace supply through at least 2028.

KLA (NASDAQ:KLAC) stock is at $150.86, up 9%, moving in step with its peers. Applied Materials trades at 18x forward 12-month earnings, the lowest multiple of the four, while Lam Research is at 19x. At the high end, KLA carries a 22x multiple and ASML commands 24x.

How Applied Materials’ Business Model Stands Apart

Breadth sets Applied Materials apart, with tools covering deposition, etch, chemical mechanical planarization (CMP), metrology and inspection. It earns recurring service revenue through its Applied Global Services arm and runs a display business. This range lets Applied Materials capture spending across most steps of chip production.

Lam Research is more concentrated, focusing on deposition and etch with heavy exposure to memory makers. ASML holds a monopoly on extreme ultraviolet (EUV) lithography, the machines that print the finest chip features. KLA dominates process control and inspection, so each peer owns a deep niche while Applied Materials branches out across many.

What Applied Materials’ Report Means for Chip Equipment Stocks

The next test for Applied Materials is whether its Q4 results and early 2027 commentary justify the group’s rallying. On the bullish side, Dickerson stated in August, “This increased demand visibility gives us high confidence that 2027 will be another strong growth year for Applied Materials.” Both ASML and Lam Research have pointed to customer visibility stretching through 2028.

Bears can point to risks outside management’s control. Applied Materials faces China export controls and a concentrated customer base, and Dickerson has warned that clean-room availability will determine what the company can ship next year. Lam Research stock fell hard after its supply-limited outlook, a reminder of how quickly sentiment can turn.

A strong outlook from Applied Materials could extend the group’s rallying, while a cautious one could reset expectations across chip equipment. Investors may want to study the details of Applied Materials’ 2027 outlook before forming any conclusions about the group.

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