Key Highlights

● Lam Research is a leading supplier of etch and deposition tools.

● The rally began with SK hynix's record profit and shortage outlook.

● Applied Materials rallied alongside Lam Research the same day.

● Not every equipment-linked name joined the advance.

Lam Research (NASDAQ:LRCX) jumped on Wednesday, October 28, as investors extended a memory-chip rally to the companies that supply the tools used to make those chips.

The semiconductor equipment maker was among the strongest technology gainers in the S&P 500, moving alongside rival Applied Materials as the Philadelphia Semiconductor Index posted a fourth straight gain.

From Memory Makers to Toolmakers

The rally began with SK hynix (NASDAQ:SKHY). The South Korean memory giant posted its first quarter with more than 100 trillion won in revenue, roughly $78.7 billion, and said it expects the memory shortage to last into 2030. Its US-listed shares jumped and Micron (NASDAQ:MU) and Sandisk (NASDAQ:SNDK) followed.

For Lam, the logic is straightforward. A prolonged shortage gives memory producers both the cash and the motivation to build more capacity, and new capacity requires equipment. Lam is a leading supplier of etch and deposition tools, which are central to manufacturing memory chips, particularly the layered NAND flash and DRAM used in AI systems.

Equipment Stocks Climb Together

Applied Materials (NASDAQ:AMAT) also jumped on Wednesday. After the bell, KLA (NASDAQ:KLAC) rose in extended trading after beating revenue and earnings expectations and issuing strong guidance tied to AI build-out demand.

Not every equipment-related name joined in. Teradyne (NASDAQ:TER) slipped after its quarterly outlook was seen as only bracketing expectations, and FormFactor (NASDAQ:FORM) fell in extended trading despite strong sales. Ultra Clean (NASDAQ:UCTT), a supplier to equipment makers, rose after reporting record revenue.

The AI Spending Backdrop

Equipment makers sit at the start of the AI supply chain, so they depend on confidence that data-center spending will continue. Wednesday supplied plenty. Vertiv Holdings (NYSE:VRT) rocketed after orders more than doubled, and Oracle (NYSE:ORCL) soared after setting a $225 billion fiscal 2030 revenue target.

The S&P 500 rose 21.38 points to 7,743.98, its third straight gain. Technology was the leading sector, while utilities and real estate lagged as long-dated Treasury yields climbed.

What to Watch

After the bell, Alphabet (NASDAQ:GOOGL) slid sharply in extended trading on a profit miss, dragging on chip stocks, though it raised its 2026 capital spending forecast to between $195 billion and $205 billion. Microsoft (NASDAQ:MSFT) rose after its Azure business accelerated.

Amazon (NASDAQ:AMZN) reports after Thursday's close, and Apple (NASDAQ:AAPL) and Meta (NASDAQ:META) report later this week. The advance third-quarter GDP estimate and September PCE inflation data arrive at 8:30 a.m. ET on Thursday.