Chip stocks slide as Tesla spending cut meets weaker Lam forecast

Thursday’s selloff followed three pressures cited by MarketWatch: Tesla’s lower spending target, Lam Research’s weaker-than-expected forecast and renewed concern that the AI boom depends on outside funding. Micron was among the chip stocks affected, although the report’s focus was the broader semiconductor group rather than a single company’s results.

The move follows a period in which AI-related spending has supported demand expectations across chip equipment and memory. Lam Research’s fiscal-year revenue was $23.2B, up 26.0% year over year, but its forecast became a fresh test of how much of that growth investors already expect. Tesla’s fiscal-year 2025 revenue was $94.8B, down 2.9% year over year, adding a company-specific spending signal to the broader funding concern.

Lam Research connects to the story through semiconductor manufacturing equipment: a weaker forecast can affect expectations for fab investment and orders. Tesla connects through its capital-spending plans and role in the AI and electric-vehicle investment cycle. Micron is named as a stock affected by the selloff, while the funding concern reaches beyond any one chipmaker.

The evidence points to market concern rather than a confirmed change in industry demand. The report identifies the three reasons for the fall, but the duration of the spending slowdown and the extent of any funding pressure remain open questions.

Lam Research’s next results and outlook will be the clearest company-level check on equipment demand. Tesla’s next update will show whether its lower spending target persists, while subsequent semiconductor-company forecasts will help distinguish a sector reset from a broader deterioration in AI investment.