Shares in chipmaking equipment companies rallied during Thursday’s pre-market session after U.S. memory chipmaker Micron (MU) reported blockbuster Q3 fiscal 2026 earnings on Wednesday. The results further showed that demand for memory products remains elevated.
Micron Lifts Chip Gear Stocks on AI Demand
Lam Research (LRCX) and Applied Materials (AMAT) led the rally, rising by more than 6%. Similarly, KLA Corporation (KLAC) and ASML Holding (ASML) climbed by more than 4% as of the time of writing.
Notably, revenue from Micron’s Cloud Memory Business Unit (CMBU) hit $13.77 billion, up by 307% from a year ago.
CMBU is Micron’s business segment that makes memory solutions for hyperscale cloud customers and data centers to power their massive AI workloads. These solutions include high-bandwidth memory, DRAM (Dynamic Random Access Memory ), and advanced NAND products.
Overall, Micron’s revenue jumped by more than 300% year-over-year to $41.46 billion. Its profits grew even more as adjusted earnings per share climbed by over 1,200% to $25.11.
The record revenue and profit came as the shortage in the supply of AI memory products continues to drive up prices amid strong demand.
Analysts Flag Gains for Chip Equipment Stocks
Meanwhile, the rally in chipmaking equipment stocks comes about two weeks after Cantor Fitzgerald’s five-star analyst CJ Muse reaffirmed his Buy ratings on KLA Corporation, Applied Materials, and Lam Research. He also raised his price target on the companies.
Muse noted that the chip gear industry “is in the early innings of a multi-year supply-constrained and durable upcycle.” The analyst noted that the outlook for the companies had improved over the past months. He could also see a clearer path for sustained demand for chipmaking equipment through 2028.
In the same vein, Barclays’ Thomas O’Malley recently predicted strong spending on DRAM, NAND, foundry, and logic chip equipment. He sees this pushing the wafer fabrication equipment market to $209.5 billion in 2027. This is up from his earlier estimate of $159 billion.
Which Chip Equipment Stock Is the Best Buy?
All four chip gear stocks highlighted in this article currently carry a Strong Buy consensus rating from Wall Street analysts, according to TipRanks’ Stock Comparison tool. However, only ASML Holding (ASML) currently has upside potential.
Analysts see ASML stock rising by 14% in the months ahead. This is based on an average price target of $2,011.
