One of Europe’s most respected value funds just rang the register on three of the hottest semiconductor equipment stocks — and their reasoning is a wake-up call for any retail investor sitting on large chip-sector gains. Vltava Fund, a Czech value-investing firm with a disciplined track record, disclosed in its Q2 2026 investor letter that it sold out of Lam Research (NASDAQ: LRCX), Applied Materials (AMAT), and KLA Corporation (KLAC) during the quarter — citing valuations that had stretched to 20x sales and 50x earnings.
The move is notable given how well these stocks have performed. Lam Research closed at $351.41 on July 2 and has surged 255% over the past 52 weeks. Its most recent quarterly revenue hit $5.84 billion — up 24% year-over-year — driven by relentless demand for advanced chip fabrication equipment tied to AI infrastructure buildouts. But Vltava’s letter argues that even excellent businesses become dangerous investments when prices leave no margin of safety. “Once the valuations of even the best companies begin to reach levels of 20x sales and 50x earnings, the balance between quality and price shifts significantly to the investor’s disadvantage,” the fund wrote. They also reminded investors that the semiconductor equipment industry remains highly cyclical, and that the current boom does not eliminate downside risk — it may simply be delaying it.
For retail investors holding chip equipment stocks, Vltava’s exit is worth taking seriously — not as a signal to panic-sell, but as a prompt to review position sizing. When a value fund with a strong long-term record sells at peak fundamentals, it is often a sign that a stock’s easy gains are behind it. Consider trimming outsized positions in LRCX, AMAT, or KLAC if they have become disproportionate in your portfolio. Proceeds could be redeployed into other parts of the AI supply chain trading at more reasonable valuations — or held as dry powder for the next dip. Locking in a 255% gain at 50x earnings, rather than waiting for perfect timing, is never a bad trade.
