Lam Research said it expects December quarter revenue to be higher than Wall Street expected as chipmakers order more equipment to make semiconductors for artificial intelligence applications. Shares of the Fremont, California-based company rose 5% in after-hours trading.

After OpenAI’s ChatGPT caught the attention of consumers and investors, companies across industries are racing to incorporate AI features, benefiting companies like Lam.

The AI boom is also helping chipmakers mitigate a post-pandemic slump in demand for personal computers and smartphones.

Lam, along with Applied Materials and Dutch company ASML, are among a handful of major suppliers of wafer-fabrication equipment, the complex and expensive machines used to make semiconductors.

The company expects revenue of $4.3 billion, plus or minus $300 million, for the current quarter ending Dec. 29, while analysts were expecting revenue of $4.24 billion, according to data compiled by the London Stock Exchange. Lam reported revenue of $4.17 billion in the three months ended Sept. 29, beating expectations of $4.05 billion.

Teradyne forecasts strong fourth quarter results

Meanwhile, Teradyne Intel forecast fourth-quarter profit and revenue on Wednesday that will beat Wall Street expectations, pushing its shares up 2.5% in after-hours trading, as demand for semiconductor testing equipment accelerates.

Growing demand for memory chips and cloud computing companies that provide artificial intelligence capabilities has benefited Teradyne as the chip testing technology provider helps ensure the performance of semiconductors, electronic systems and wireless devices.

The company forecast fourth-quarter revenue of $710 million to $760 million, with the midpoint above analysts' average estimate of $736.5 million, according to data compiled by the London Stock Exchange. Teradyne forecast fourth-quarter adjusted earnings per share of 80 cents to 97 cents, compared with expectations of 88 cents.

The company provides technology used to test chips and electronic devices to chip companies including Qualcomm and Texas Instruments. The company also sells robotic systems to customers in the manufacturing industry.

The company's third-quarter revenue rose about 5% from a year earlier to $737 million, compared with expectations of $716.4 million, according to data compiled by the London Stock Exchange. On an adjusted basis, the company earned 90 cents per share for the quarter ended Sept. 29, compared with expectations of 78 cents per share.

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