Lam Research drops amid AI spending slowdown fears

Lam Research shares fell 6.7% in morning trading Thursday as a selloff across the semiconductor equipment sector deepened. The decline marked the eighth consecutive session of losses for the stock, wiping out approximately $75 billion in market value during that period.

The semiconductor equipment sector faces mounting concern that AI-related capital expenditure, which drove equipment orders throughout 2026, may be slowing. Equipment manufacturers sell to fabrication plants based on planned capacity expansion rather than current chip production, making them vulnerable to shifts in spending plans.

The concerns began after Anthropic's CEO publicly advocated for slower AI model development. Applied Materials added to the uncertainty on October 13 when it declined to provide a wafer fabrication equipment spending forecast during its investor day, leaving the industry without clear visibility on near-term orders.

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