Key Highlights

● FormFactor traded at about $95.83 on October 22.

● It was roughly $64 below its June high of $159.93.

● The drop came without company-specific news.

● Teradyne closed at $308.75, down $36.74, and reports on October 27.

FormFactor (NASDAQ:FORM) tumbled on Thursday, October 22, 2026, as chip-test and semiconductor-equipment stocks followed Lam Research (NASDAQ:LRCX) sharply lower. The stock, a member of the S&P SmallCap 600, traded at about $95.83.

The drop came without company-specific news. FormFactor moved with its sector.

The Lam read-through

The trigger was Lam Research, one of the world's biggest makers of chip-manufacturing equipment. Lam reported record revenue of $8.22 billion late on Wednesday, but its December-quarter guidance of $8.6 billion, plus or minus $400 million, had a midpoint slightly below what many investors were hoping for.

More worrying for the industry was Lam's warning about supply. The company said upstream parts shortages and certified clean-room constraints "continue to curb manufacturing velocity" and will persist into 2027.

Lam's chief financial officer said revenue would have been higher without "near-term supply chain constraints that we are actively managing," and added that "things are going to continue to be constrained."

Test names hit hard

FormFactor was among the chip names that plummeted, alongside Applied Materials (NASDAQ:AMAT), Lam Research, KLA (NASDAQ:KLAC) and Penguin Solutions (NASDAQ:PENG). Lam itself plunged, while KLA and Applied Materials also fell steeply.

Test-equipment makers were hit especially hard. Teradyne (NASDAQ:TER), a larger peer in chip testing, closed at $308.75, down $36.74, with no company news of its own. Cohu (NASDAQ:COHU), another small-cap test company, also sank.

As a chip-test company, FormFactor is linked to the pace of semiconductor production, so any sign of slowing production velocity can weigh on the stock.

A big run before the drop

FormFactor had been one of the chip sector's strong performers in 2026. Even after Thursday's slide, the stock remained sharply higher for the year, though at about $95.83 it was roughly $64 below its June high of $159.93.

That kind of run can leave a stock vulnerable when sentiment toward a sector turns.

The broader market

The Philadelphia Semiconductor Index posted its biggest one-day drop since June 23. The Nasdaq Composite fell 694.00 points to 26,008.86, its steepest decline since June 5, and the S&P 500 lost 93.74 points to 7,663.43, its worst day since July.

The report from Meta Platforms (NASDAQ:META) showing 2026 capital spending of $135 billion to $145 billion and negative free cash flow added to fears about the cost of the AI build-out.

Yet the selloff was concentrated. The Russell 2000 edged up 3.01 points, the Dow Jones Industrial Average finished essentially flat, and about two of every three S&P 500 stocks rose, according to market reports, as money rotated into consumer staples, health care and utilities. Treasuries rallied, sending the 10-year yield back below a closely watched threshold for the first time since September 22.

FormFactor Looks to Teradyne's October 27 Report

The next big test for chip-test stocks comes on October 27, when Teradyne reports earnings. Its commentary on demand and supply constraints could offer a read-through for FormFactor.

The following days are also critical, with Microsoft (NASDAQ:MSFT) and Alphabet (NASDAQ:GOOGL) reporting on October 28 and Amazon (NASDAQ:AMZN) and Intel (NASDAQ:INTC) on October 29. Their spending plans will shape expectations for chip production and, by extension, for testing demand.