Lam Research Corp has recorded its longest losing streak since its 1984 listing, closing lower for nine consecutive sessions. The semiconductor equipment maker’s shares have declined 21.7% over this period, breaking a record set in September 2015.

The sell-off reflects broader pressure on wafer-fab equipment stocks. KLA Corp also fell for nine straight days, dropping 16.3%, while Applied Materials Inc. slid for eight sessions, losing 21.3%. The entire sector is being treated as a single trade by investors.

Sector-wide pressure and analyst views

The decline accelerated after Applied Materials declined to provide a forecast for wafer fab equipment spending during its investor day on Tuesday. This omission removed a key benchmark for industry growth plans, triggering further selling. On Thursday, Applied Materials dropped another 4.9% and KLA Corp fell 3.4%.

Despite the technical breakdown, Wall Street consensus remains bullish. Twenty-one of 22 analysts tracked by Benzinga rate Lam Research a Buy. The average price target of $346 implies 26.3% upside from the Thursday close of $274.12.

What the numbers show

A divergence exists between price action and fundamental expectations. While the stock trades 37% below its June 30 peak of $433.33, it remains up 60% year-to-date. Analysts attribute the current volatility to profit-taking after a strong rally rather than deteriorating fundamentals.

Morgan Stanley analyst Shane Brett raised his price target to $385 from $367, citing expectations for the wafer fab equipment run-rate to surpass $200 billion in the December quarter. Brett noted that Lam Research is positioned to be the fastest grower for the third consecutive year due to logic share gains.

Upcoming earnings test

Investors await the company’s September-quarter results on October 21 for further clarity. Lam Research has guided for revenue of $8.1 billion, which is more than 20% above the record $6.72 billion reported in the June quarter. Adjusted earnings are guided to approximately $2.15 per share at the midpoint, compared with a record $1.82 in the previous quarter.

UBS analyst Timothy Arcuri expects a "very strong" report and "even more robust" guidance, noting that the focus will shift to capacity expansions and margin trajectories rather than just quarterly numbers.

Lam Research Corp received a positive rating update from Morgan Stanley, which maintained its Overweight stance on the stock. Analyst Shane Brett increased the price target to $385 from the previous level of $367.

This adjustment signals continued confidence in the company's trajectory within the semiconductor equipment sector. The firm did not alter its fundamental rating, keeping the recommendation at Overweight while refining the valuation model to reflect the higher target.