Semiconductor Equipment Stocks: A Deep Dive into AMAT, LRCX, KLAC, and ASML
The semiconductor equipment sector has been a driving force behind technological advancements, yet its stock performance has been far from promising. The four dominant players in this space—Applied Materials (AMAT), Lam Research (LRCX), KLA Corporation (KLAC), and ASML (ASML)—are all facing their own set of challenges, with their stocks trading well below their 200-day moving averages and significantly off their all-time highs. Investors who were once pouring capital into semiconductor equipment names have shifted focus toward AI-driven chip designers like Nvidia and the hyperscale infrastructure providers supporting them. This shift has left semiconductor equipment stocks struggling to regain momentum, with the broader market rotation out of the sector accelerating since mid-2024.
Applied Materials
Applied Materials has been in a steady downtrend, with its stock struggling to find support as it continues to drift further below its 200-day moving average, as shown in Chart 1. The stock has failed to mount any meaningful rallies, signaling a lack of confidence from institutional investors.
Chart 1
The company, which once benefited from the race to build out semiconductor capacity in 2021 and 2022, now finds itself in a different landscape. Chipmakers have shifted from expansion to cost control, delaying equipment purchases and tightening their capital expenditure budgets.
What makes Applied Materials’ situation particularly concerning is that while semiconductor cycles are nothing new, the company’s inability to break out of its downward trajectory suggests something more than just cyclical weakness. Investors who are looking for a turning point in the stock should be watching whether it can reclaim its 200-day moving average, but so far, every attempt has resulted in failure.
Chart 2 shows AMAT’s share of the WFE market since 2011, and the trendline (dotted) shows the change in global market share, which is flat through 2024. This despite the fact that in 2019 AMAT management took $331 million from 2018 revenues and put them in 2019 in response to concern that ASML (ASML) might take over the global #1 position as semiconductor equipment supplier. In fact, for the first time in 20 years, ASML did indeed dethrone AMAT, and it did it again in 2023 and 2024, according to my report at The Information Network entitled Global Semiconductor Equipment: Markets, Market Shares and Market Forecasts.
Chart 2