Better Semiconductor Equipment Stock: Applied Materials vs. Lam Research

Lam Research

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Semiconductor equipment demand has boomed in recent years, driven by the strong demand for artificial intelligence (AI) chips, which explains why shares of Lam Research (NASDAQ: LRCX) and Applied Materials (NASDAQ: AMAT) have been in fine form this year.

While Lam stock has risen 84% in 2026, Applied Materials is sitting on slightly higher gains of 89%. However, both semiconductor stocks have pulled back over the past three months. Lam has retreated by 27% since reaching a 52-week high on June 30. Applied Materials stock also hit its 52-week high on that date, and it has lost nearly a third of its value since then.

Savvy investors can consider using their slide as a buying opportunity. After all, sales of semiconductor manufacturing equipment are estimated to jump by 23% in 2026 to $166 billion, according to industry association SEMI. Importantly, spending on semiconductor manufacturing equipment is expected to jump to $201 billion in 2027 and $229.5 billion in 2028.

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