Applied Materials Sinks 12%, Lam Research Down 14% as Chip Stock Rout Deepens After Midterms

David Hanson • 4 minute read
Reviewed by: David Hanson
Last updated Nov 5, 2026

@Aaron Hawkins from Getty Images via Canva, @Kittipong Jirasukhanont from PhonlamaiPhoto's Images via Canva

Key Takeaways

  • Applied Materials fell 12% today as the chip sell-off that began after the midterms deepened, pulling down Lam Research, KLA and Teradyne.
  • Investors fear data-center spending will slow, and Qualcomm’s weak guidance didn’t help.
  • Analysts still expect Applied’s normalized EPS to nearly double from fiscal 2025 to fiscal 2027, so the drop has come from its multiple.
  • Applied’s Nov. 12 report is the next real test.

Applied Materials (AMAT) fell 12% today on no news of its own, as the chip sell-off that began after Democrats’ midterm wins got worse.

Democrats have signaled plans to regulate AI, and data-center stocks felt it first on Wednesday, before Qualcomm’s weak guidance after the close added to the pressure. Chip-equipment makers Lam Research (LRCX), KLA (KLAC) and Teradyne (TER) fell with Applied.

The Street’s numbers haven’t moved

Analysts still expect Applied’s earnings to climb steeply:

Bar chart from TIKR of Applied Materials' normalized EPS, actual and consensus estimates, $ per share, fiscal 2023-2028 (years to October).
Applied Materials (AMAT): normalized EPS, actual and consensus estimates, $ per share, fiscal 2023-2028 (years to October) (TIKR)

I see no reason for those estimates to fall before Nov. 12.

TIKR tracks 41 analysts on Applied Materials. How many say “Buy”?

See the full breakdown of Buy, Hold, and Sell ratings on Applied Materials, along with Wall Street’s revenue and earnings estimates, all in one place. More than 500,000 investors use TIKR to research stocks like this one. See Applied Materials’ Analyst Ratings

Back to an ordinary multiple

So the drop has come from the multiple. On Nov. 2, Applied traded at 21x forward earnings, right at its five-year average and far below the 49x it reached on June 30:

Line chart from TIKR of Applied Materials' forward (NTM) P/E, last 5 years.
Applied Materials (AMAT): forward (NTM) P/E, last 5 years (TIKR)

At today’s price, it’s even lower. Still, the last time an equipment boom peaked, the multiple fell to 8.2x at the October 2018 quarter-end, so the price doesn’t assume a real downturn.

Analysts haven’t followed the stock down. Their average price target was $628 on Nov. 2, close to its September high:

Line chart from TIKR of Applied Materials' analysts' consensus (mean) price target, $ per share, last year.
Applied Materials (AMAT): analysts’ consensus (mean) price target, $ per share, last year (TIKR)

The whole group is getting marked down

Lam Research is down 14%. Two weeks ago it reported record September-quarter revenue of $8.22 billion, guided the December quarter to $8.6 billion and said it still expects the industry to spend more than $200 billion on chipmaking equipment in 2027. Only 8% of Lam’s September-quarter revenue came from the US, while 35% came from China. Will a fight in Washington change what chip plants in Asia spend next year?

KLA fell 12% and Teradyne fell 14%, a week after both beat the midpoint of their guidance. KLA expects December-quarter revenue of $4.7 billion, up from $4.14 billion in September. Teradyne’s third-quarter revenue grew 70%, with record memory test revenue that it credits to AI, and it guided the fourth quarter about flat.

Nov. 12 is the real test

To me, the stock has been marked down for a slowdown no company has reported. We’ll find out from the guide for Applied’s 14-week first quarter of fiscal 2027. If it shows equipment revenue still climbing, I’d expect much of this drop to reverse. If it shows equipment revenue flattening, today’s multiple won’t look so cheap.

So what is Applied Materials stock actually worth?

TIKR lets you forecast the future price of any stock in less than a minute. Just enter a few assumptions into TIKR’s valuation model and see what Applied Materials could be worth. Start from Wall Street consensus estimates, or adjust the inputs to reflect your own view of the business. It’s free to use.

Value Applied Materials for free

Disclaimer:

Please note that the articles on TIKR are not intended to serve as investment or financial advice from TIKR or our content team, nor are they recommendations to buy or sell any stocks. We create our content based on TIKR Terminal’s investment data and analysts’ estimates. Our analysis might not include recent company news or important updates. TIKR has no position in any of the stocks mentioned. Thank you for reading, and happy investing!

Join thousands of investors worldwide who use TIKR to supercharge their investment analysis.

Sign Up for FREENo credit card required