Applied Materials Rallies 8% Ahead of Earnings as Chip Stocks Rebound; Lam Research Jumps 9%, KLA Climbs 7%

Chip equipment stocks are rallying sharply from a rough month, and one equipment leader heads into its earnings report riding that momentum. Applied Materials (NASDAQ:AMAT | AMAT Price Prediction) stock is at $403.44 in afternoon trading, up 8%. The company is scheduled to report its Q4 FY2026 results on November 12, ending a year in which it has ranked among the sector’s biggest winners.

Two close rivals are rallying alongside Applied Materials. Lam Research (NASDAQ:LRCX) stock is at $241.43, up 9%. At the same time, KLA (NASDAQ:KLAC) stock is trading at $163.49, up 7%.

CoreWeave’s Beat-and-Raise Quarter Revives the AI Chip Trade

The broad chip rebound traces back to CoreWeave (NASDAQ:CRWV), which reported a beat-and-raise quarter after the close on November 10. CoreWeave’s results revived the AI trade. They also relieved fears about how AI data center buildouts get funded (we highlighted seven suppliers supporting that expansion, from power to cooling, in a free report you can grab here). Equipment makers such as Applied Materials benefit because chipmakers buy their tools to add capacity for AI chips and high-bandwidth memory (HBM).

Rates remain a drag in the background, and that makes the move in Applied Materials stand out. Austan Goolsbee called the latest inflation report “borderline disturbing” as the Federal Reserve weighs more rate hikes. That background hasn’t slowed buyers returning to AI hardware names.

What Lam Research and KLA Reveal About Applied Materials’ Bounce

Applied Materials stock had dropped 20% over the past month before this rebound, part of a steep pullback across semiconductor names. Lam Research fell harder, sliding 24% over the same stretch, and its gain is the largest of the group even though it isn’t the one reporting. KLA held up better with a 16% monthly decline, and its bounce is the smallest of the three.

Both Lam Research and KLA said on their October earnings calls that they expect wafer fab equipment (WFE) spending to top $200 billion in 2027. That is up from the mid $150 billion range in 2026. For Applied Materials, matching gains across all three names point to a sector-wide return of risk appetite for AI hardware, and a fresh read on that shift arrives with the Applied Materials report.

How Applied Materials’ Toolkit Differs From Lam Research and KLA

Applied Materials runs the broadest portfolio of the three, selling materials engineering tools across deposition, etch, chemical mechanical planarization (CMP), metrology, inspection and services, and breadth gives the company strong positions in dynamic random-access memory (DRAM), leading-edge foundry and logic, and advanced packaging.

Lam Research concentrates on deposition and etch equipment and backs it with a large customer support and spares business. That narrower focus leaves Lam Research more heavily tied to memory, including NAND flash, and to foundry and logic transitions. Management also says the company has the industry’s largest installed base of NAND systems.

KLA specializes in process control, meaning the metrology and inspection systems that catch defects, and it also runs a printed circuit board inspection business. Chief executive Rick Wallace said on October 28 that KLA’s process control work “continues to be critical to the AI ecosystem buildout.”

Applied Materials’ Earnings Report Puts the Rebound to the Test

In its Q3 FY2026 results on August 13, Applied Materials issued Q4 guidance. It expects revenue of approximately $10.25 billion, plus or minus $500 million, and adjusted earnings per share (EPS) of $4.02, plus or minus $0.20. CEO Gary Dickerson stated then that the company expects “another strong growth year for Applied Materials in 2027.”

The next test for Applied Materials is whether AI-driven demand for advanced logic and memory equipment keeps orders strong and supports a solid outlook for the coming quarter. China is the other swing factor, since the region’s share of Applied Materials’ revenue relieved to 28% from 35% amid export-control uncertainty. Customers have given the company longer visibility, with CFO Brice Hill noting on the August call that some conversations are “now extending to 2030.”

Applied Materials gives bulls plenty to like: record results, rising memory and packaging demand, and a stock that has already absorbed a deep monthly drop. Still, a cautious China outlook or any sign of order fatigue could quickly reverse a bounce built largely on sentiment. Investors researching AMAT stock might want to stay cautious until the debate over Applied Materials’ outlook resolves.

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