Lam Research Plummets 2.67%: What’s Fueling the Selloff Amid AI Chip Hype?

Summary
• Lam Research (LRCX) trades at $144.83, down 2.67% intraday
• Intraday range spans $143.45 to $154.37
• 52-week high of $167.15 remains distant amid bearish technicals
• Options chain shows heavy put activity at $143–$144 strike prices

Lam Research’s sharp decline has ignited urgency among traders, with the stock trading below its 30-day moving average of $151.00. The selloff coincides with elevated put volume at key support levels and a sector-wide pullback led by Applied Materials’ -2.96% drop. With AI-driven demand for chip equipment still intact, the move raises questions about short-term volatility versus long-term fundamentals.

Extended Trading Volatility and Sector Weakness
The intraday selloff stems from extended trading activity and sector-wide weakness. Lam Research’s price action reflects a broader semiconductor sector correction, as Applied Materials (AMAT) and peers face profit-taking after recent gains. While no direct earnings or product news triggered the move, the lack of positive sentiment in recent headlines—coupled with elevated put volume at $143–$144 strikes—suggests institutional hedging or short-term profit-taking. The stock’s 2.67% drop aligns with a breakdown below the 200-day moving average ($100.52), amplifying technical bearish signals.

Semiconductor Sector Under Pressure as AMAT Leads Weakness
The semiconductor sector faces headwinds as Applied Materials (AMAT) declines 2.96%, dragging peers lower. Lam Research’s 2.67% drop mirrors the sector’s broader correction, with AI-driven demand for chip equipment yet to translate into sustained price strength. While global semiconductor sales rose 15.8% QoQ in Q3 2025, near-term volatility persists amid regulatory scrutiny and supply chain adjustments. The sector’s mixed performance highlights short-term profit-taking despite long-term growth tailwinds.

Bearish Options and ETFs to Capitalize on Volatility
• 200-day average: $100.52 (well below current price)
• RSI: 41.02 (oversold territory)
• MACD: 1.92 (bearish divergence with signal line at 4.69)
• Bollinger Bands: Price at $144.83 near lower band ($143.14)

Technical indicators suggest a short-term bearish bias, with key support at $143.14 and resistance at $156.13. The options chain reveals two high-leverage put contracts ideal for volatility plays: LRCX20251128P144 and LRCX20251128P143.

LRCX20251128P144
• Contract Code: LRCX20251128P144
• Type: Put
• Strike Price: $144
• Expiration: 2025-11-28
• IV: 57.72% (high volatility)
• Leverage Ratio: 30.84% (moderate amplification)
• Delta: -0.449 (moderate sensitivity)
• Theta: -0.0152 (slow time decay)
• Gamma: 0.0301 (high sensitivity to price swings)
• Turnover: 36,683 (liquid)

This put offers a 49.21% price change potential under a 5% downside scenario (ST = $137.64). The high gamma and moderate delta make it ideal for a sharp rebound in volatility.

LRCX20251128P143
• Contract Code: LRCX20251128P143
• Type: Put
• Strike Price: $143
• Expiration: 2025-11-28
• IV: 51.18% (moderate volatility)
• Leverage Ratio: 39.71% (strong amplification)
• Delta: -0.413 (moderate sensitivity)
• Theta: -0.0036 (minimal time decay)
• Turnover: 35,015 (liquid)

This put shows a 43.14% price change potential under the same 5% downside scenario (ST = $137.64). The low theta and high gamma position it as a hedge against prolonged bearish momentum.

Action: Aggressive bears may consider LRCX20251128P144 into a breakdown below $143.14, while conservative traders could use LRCX20251128P143 as a volatility play.

Backtest Lam Research Stock Performance
I ran into an internal‐parameter error when I tried to generate the exact event-date file (the message “ ：code_result, ” indicates the calculation service rejected the request). To complete the back-test we must first create a list of “plunge” dates—that is, all sessions since 2022-01-01 where that day’s intraday LOW was at least 3 % below the previous day’s CLOSE. Here are two options to move forward:1. Retry the event-date calculation with an adjusted request that explicitly defines the rule (low ≤ previous-close × 0.97) using the OHLC file we already pulled. 2. If you have a different definition (e.g., closing price down ≥ 3 % instead of the intraday low), let me know and I’ll use that.Please let me know which definition you’d like to use (intraday low vs daily close), or confirm that the original rule is correct so I can retry and then finish the back-test.

Short-Term Volatility Plays as Long-Term Fundamentals Remain Intact
Lam Research’s 2.67% intraday drop reflects sector-wide profit-taking and technical bearish signals, but long-term fundamentals—driven by AI chip demand—remain robust. Traders should monitor the $143.14 support level and AMAT’s -2.96% decline for sector cues. For those seeking directional exposure, the LRCX20251128P144 put offers a high-gamma, high-leverage play on continued volatility. If the stock breaks below $143.14, consider adding to short positions or tightening stop-losses on longs.