Lam Research Drops 5% Amid Broader Tech Selloff and Nvidia Leadership Concerns

Shares of chip equipment manufacturer Lam Research Corp. (NASDAQ:LRCX) dropped 5.04% to trade at $221.99 on Friday. The retreat followed an abrupt departure by Nvidia Corp. CEO Jensen Huang, which added fresh selling pressure to artificial intelligence infrastructure and semiconductor equities. The tech-heavy Nasdaq declined 2.11%, while the S&P 500 slid 1.02%, making technology the day's worst-performing sector with a 3.13% loss.

The selloff extended broadly across the semiconductor equipment industry, impacting peers like Applied Materials Inc. and KLA Corp. Lam Research's drop outpaced the wider technology sector downturn. Over the preceding 30 and 90 days, the technology sector has faced sustained pressure, declining 11.62% and 11.57% respectively. Conversely, defensive areas demonstrated resilience, with Consumer Staples posting a 1.16% gain.

Technical indicators highlight ongoing challenges for Lam Research shares, which traded 5.5% below their 20-day simple moving average and more than 20% under their 50-day moving average. The equity has remained burdened by a bearish "death cross" pattern from November, when the 50-day moving average dipped beneath the 200-day average. Nevertheless, the moving average convergence divergence indicator stayed above its signal line, hinting that downward momentum might be moderating.

What to watch next: Traders are monitoring immediate resistance near $260.50 and support levels around $184.

Despite the recent market downturn, Wall Street maintains an overall positive outlook. Lam Research holds a consensus Buy rating alongside an average analyst price target of $384.31. Recent adjustments include B. Riley Securities cutting its forecast to $310, UBS lowering its target to $400, and Citigroup reducing its expectation to $435, though all three firms maintained their Buy ratings.