2 AI Equipment Stocks Poised for Long-Term Growth

AMAT and LRCX surge as AI chip demand lifts semiconductor equipment makers, positioning them to mirror NVDA's success.

Apr. 2, 2026 at 8:43pm

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A highly detailed, glowing 3D macro illustration of futuristic semiconductor manufacturing equipment and circuitry, bathed in neon cyan and magenta lights, conceptually representing the technological backbone enabling the AI boom.Semiconductor equipment makers are emerging as the 'pick-and-shovel' plays powering the AI revolution, providing critical infrastructure to support the growing demand for advanced chips.Albany Today

Despite recent market volatility, two semiconductor equipment makers - Applied Materials (AMAT) and Lam Research (LRCX) - have seen significant stock gains in the first quarter of 2026 as they capitalize on the booming demand for AI-related chips and infrastructure. Analysts believe these 'pick-and-shovel' AI plays are well-positioned to replicate the long-term growth trajectory of industry leader NVIDIA.

Why it matters

As AI adoption accelerates, the companies that provide the critical semiconductor manufacturing equipment and technologies are poised to be major beneficiaries, much like NVIDIA has been with its GPU chips. AMAT and LRCX's strong performance amid broader tech sector weakness demonstrates their ability to weather market cycles and sustain growth.

The details

Applied Materials reported Q1 2026 revenues of $7.01 billion and expects Q2 revenues of $7.65 billion, indicating continued momentum. The company leads in high-performance, energy-efficient chip equipment and is targeting over 20% growth this year. Lam Research also had a strong Q4 2025, with revenues of $5.34 billion and a 49.7% non-GAAP gross margin. Rising memory chip production investments by companies like Micron are expected to further benefit Lam Research.

  • In the first quarter of 2026, NVIDIA's shares declined by over 5%.
  • Applied Materials reported Q1 2026 revenues of $7.01 billion.
  • Lam Research reported Q4 2025 revenues of $5.34 billion.

The players

NVIDIA Corporation

A leading technology company that produces graphics processing units (GPUs) for powering new AI applications.

Applied Materials, Inc.

A leading semiconductor equipment manufacturer that is benefiting from increased AI investments and targeting over 20% growth in 2026.

Lam Research Corporation

A major semiconductor equipment provider that is well-positioned to gain from rising memory chip production investments by companies like Micron Technology.

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What they’re saying

“We lead in high-performance, energy-efficient chip equipment, and are targeting 20%+ growth this year.”

— Gary Dickerson, President and CEO of Applied Materials

The takeaway

As AI adoption accelerates, semiconductor equipment makers like Applied Materials and Lam Research are emerging as the 'pick-and-shovel' plays that could mirror NVIDIA's long-term success, providing critical infrastructure to support the growing demand for advanced chips.