Nasdaq falls 2.6% on AI financing concerns ahead of KLA results
Key Facts
The Nasdaq Composite fell 2.6% at the close of trading on October 22, 2026, amid concerns over the cost of financing artificial intelligence expansion, as KLA approaches its quarterly earnings announcement. The S&P index fell 1.2% in the same session, posting its worst daily performance since July, according to the Associated Press. The news agency said rising borrowing costs to build data centers and buy AI chips had raised concerns over whether the sector's boom could continue. Its coverage pointed to "how expensive it is becoming to borrow money to build data centers and buy more AI chips." KLA shares closed the October 21, 2026, session at $163.43, according to EL7 data.
In its latest quarterly results covered by Investing, KLA reported revenue of $3.66 billion for the fiscal fourth quarter ended June 2026. That exceeded the market's average revenue forecast of $3.6 billion for the same period. However, the company's shares fell 10.4% in premarket trading on July 29, 2026, following the earnings announcement, according to Investing's coverage published at the time. The decline occurred in premarket trading in connection with the company's fiscal fourth-quarter results announcement. The company's revenue beat for that quarter thus coincided with a decline in its shares in trading following the disclosure.
Analysts' assessments of KLA shares saw revisions in different directions between late July and early October, with both firms cited in Investing's coverage retaining their positive ratings. In a report published on October 6, 2026, Morgan Stanley cut its price target for the shares to $227. The bank's previous price target was $253, and it maintained its Overweight rating despite the cut. In an earlier assessment following the results, Bernstein Societe Generale raised its price target to $225 in a report dated July 29, 2026. That increase was from a previous level of $197.50, with the Outperform rating maintained, according to the same coverage.
Against the backdrop of the chipmaking equipment business, Lam Research reported quarterly revenue growth of 22% from the previous quarter, according to its earnings release published on October 21, 2026. Revenue totaled $8,219,418 thousand for the quarter ended September 27, 2026. That compared with revenue of $6,722,238 thousand in the previous quarter, ended June 28, 2026, marking a quarterly increase in sales. For the following quarter ending December 27, 2026, Lam Research forecast revenue at a range midpoint of $8.60 billion. The company set a margin of plus or minus $400 million around that level in its revenue guidance for the coming period.
KLA, meanwhile, had set revenue guidance for the quarter ended September 2026 at $4.0 billion, according to Investing's coverage of the company's outlook. That figure is the midpoint of the guidance range, with a margin of plus or minus $200 million. The forecast covers the company's first quarter of fiscal 2027, which follows its fiscal fourth quarter ended June. Attention to the company's business thus shifts to results for the period ended September, after Lam Research had already reported results for its quarter ended in the same month. KLA is scheduled to report its fiscal first-quarter results on October 28, 2026, according to the date cited by Investing.