Applied Materials, KLA Corporation, Lam Research, Seagate Technology, and Western Digital Shares Decline—Key Information to Be Aware Of

Market Overview: Recent Shifts and Sector Performance

During the morning trading session, several stocks experienced declines as investors began moving funds away from the technology sector. This shift followed a period of strong gains, prompting many to secure profits.

This broader market rotation particularly impacted high-growth tech companies, with the Nasdaq registering the steepest losses among major indexes. Reports highlighted that traders were cashing in on earlier gains, especially those tied to artificial intelligence, signaling a change in market sentiment as capital flowed out of technology stocks.

Meanwhile, defense sector equities saw significant gains after President Trump announced a proposed $1.5 trillion defense budget for 2027. Leading defense contractors surged, with Northrop Grumman rising more than 10% and Lockheed Martin climbing nearly 8%. These advances helped offset the tech sector’s weakness, keeping the S&P 500 steady. The move toward industrial stocks was further supported by a rebound in oil prices, which stabilized the energy market.

Sharp market reactions to news can sometimes create attractive entry points for investors seeking quality stocks at lower prices.

Stocks Most Affected

• Applied Materials (NASDAQ:AMAT), a leader in semiconductor manufacturing, dropped 4%.

• KLA Corporation (NASDAQ:KLAC), another semiconductor manufacturer, declined by 2.8%.

• Lam Research (NASDAQ:LRCX), also in the semiconductor space, saw its shares fall 2.4%.

• Seagate Technology (NASDAQ:STX), a memory semiconductor company, dropped 7.6%.

• Western Digital (NASDAQ:WDC), another memory semiconductor firm, slid 8%.

Spotlight: Western Digital (WDC)

Western Digital’s stock is known for its volatility, having experienced 34 swings of more than 5% over the past year. Today’s price movement suggests the market views the latest news as important, but not transformative for the company’s long-term outlook.

Just two days ago, Western Digital surged 16.8% after a broader market rally fueled optimism around artificial intelligence and major technology stocks.

Recent Market Trends and Western Digital’s Performance

The S&P 500, Dow Jones, and Nasdaq have all climbed, nearing their record highs from late last year. Much of this upward momentum has been driven by the tech sector, especially companies making advances in artificial intelligence—a major focus at this year’s CES trade show in Las Vegas. This continues the strong trend from 2025, when AI developments were a key driver of the bull market. Investor sentiment has also been lifted by expectations of more accommodative monetary policy from the Federal Reserve, following weaker-than-anticipated US Services PMI data.

Since the start of the year, Western Digital’s shares have fallen 2.6%. Currently trading at $182.83, the stock is 16.7% below its 52-week high of $219.38 set in January 2026. An investor who purchased $1,000 of Western Digital stock five years ago would now see that investment valued at $3,528.

Looking Ahead: The Next Big Opportunity

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