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Lam Research (LRCX)
NASDAQ:LRCX

Lam Research (LRCX) AI Stock Analysis

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Lam Research

(NASDAQ:LRCX)

Rating:80Outperform
Price Target:
$107.00
▲(8.27%Upside)
Lam Research scores strongly due to its robust financial performance and positive earnings call insights, despite moderate revenue growth and valuation concerns. Technical indicators suggest mixed momentum, with potential overbought conditions.
Positive Factors
Emerging Technology
Lam is well-positioned to outperform in emerging technology areas such as DRAM and NAND upgrades.
Operational Improvements
Operational improvements and investments during the NAND downturn have led to a structural improvement in Lam Research's gross margins, bringing them closer to a long-term target.
Sales Growth
Multiple drivers, including foundry share gains and NAND upgrades, are enabling Lam Research's sales growth to outperform industry expectations.
Negative Factors
China Revenue Impact
A $700 million sales headwind from restrictions on China customers may impact Lam Research's second-half revenue.
Export Restrictions
China revenue mix is expected to trend lower due to export restrictions, impacting revenue in the second half of CY25.
Market Outlook
Management sees a lighter C2H25, which could be ~$700MM lower in revenue than C1H25, as all market segments, i.e. foundry/logic, DRAM, and NAND, are expected to trend lower.

Lam Research (LRCX) vs. SPDR S&P 500 ETF (SPY)

Lam Research Business Overview & Revenue Model

Company DescriptionLam Research Corporation (LRCX) is a global supplier of innovative wafer fabrication equipment and services to the semiconductor industry. Headquartered in Fremont, California, the company designs, manufactures, markets, refurbishes, and services semiconductor processing equipment used in the fabrication of integrated circuits. Lam Research's core products include etch, deposition, strip, and wafer cleaning systems, which are critical in the production of semiconductors for a wide range of electronic devices.
How the Company Makes MoneyLam Research makes money primarily through the sale of wafer fabrication equipment and the provision of related services. Its revenue model revolves around two key streams: system sales and customer support-related services. System sales involve the sale of new equipment and technologies to semiconductor manufacturers, while customer support-related services include maintenance, spare parts, upgrades, and refurbishment of existing equipment. The company also benefits from long-term supply agreements and partnerships with leading semiconductor manufacturers, which contribute to consistent revenue streams. Additionally, Lam Research invests in research and development to innovate and maintain its competitive edge, ensuring a steady demand for its advanced solutions in the rapidly evolving semiconductor industry.

Lam Research Key Performance Indicators (KPIs)

Any
Any
Revenue by Segment
Revenue by Segment
Analyzes revenue from different business segments, highlighting which areas drive growth and profitability, and indicating where the company might focus future investments or face challenges.
Chart InsightsLam Research's Systems segment is showing a recovery after a dip in 2023, with recent quarters reflecting a positive trend. The earnings call highlights strong foundry revenue and strategic product wins, which are likely driving this rebound. Meanwhile, the Customer Support and Other segment is benefiting from a 21% year-over-year increase, supported by growth in upgrades. Despite challenges in the memory systems segment and potential tariff impacts, Lam's focus on technology inflections and market expansion positions it well for continued growth, with a confident outlook for outperforming industry trends.
Data provided by:Main Street Data

Lam Research Earnings Call Summary

Earnings Call Date:Apr 23, 2025
(Q3-2025)
|
% Change Since: 48.48%|
Next Earnings Date:Jul 30, 2025
Earnings Call Sentiment Neutral
The earnings call presented a strong performance in revenue and gross margins, with record-breaking results in foundry revenues and strategic wins in product development. However, challenges in the memory systems segment, particularly in China, and the potential impacts of tariffs create a balanced outlook.
Q3-2025 Updates
Positive Updates
Record-Breaking Foundry Revenue
Lam Research achieved a record quarter for foundry revenues, demonstrating solid product momentum and leading-edge technology inflections. Foundry represented 48% of systems revenue, up from 35% in the previous quarter.
Gross Margin and Operating Margin Excellence
The highest quarterly gross margin percentage since Lam merged with Novelis in 2012 was achieved at 49%, and the operating margin reached 32.8%, both exceeding previous records.
Strong Performance in Data Center and Logic Segments
Significant gains in deposition and etch intensity due to semiconductor device complexity were noted. The ACARA system solidified its market-leading position in conductor etch.
Innovative Product Developments and Customer Wins
Lam's atomic layer deposition (ALD) products and the Altus Halo system have secured multiple key wins for spacer applications and increased adoption across leading 3D NAND customers.
Customer Support Business Group Achievements
The Customer Support Business Group generated approximately $1.7 billion in revenue for the March quarter, a 21% increase from the same period in 2024.
Negative Updates
Decreased Memory Systems Revenue
Memory systems revenue was 43% of total systems revenue, a decrease from 50% in the prior quarter, with non-volatile memory accounting for 20%, down from 24%.
China Revenue Challenges
China region accounted for 31% of revenue, flat from the prior quarter, with restrictions affecting shipments to a domestic China customer classified as a non-volatile memory producer.
Deferred Revenue and Advanced Payments
The deferred revenue balance remained flat at $2 billion, with advanced payments trending lower.
Potential Impact of Tariffs
The ongoing tariff and global economic environment presents dynamic challenges, with potential impacts on customer demand and supply chain operations.
Company Guidance
During the Lam Research March 2025 earnings call, the company reported strong financial results, with revenues reaching $4.72 billion, an 8% increase from the prior quarter. Gross margin was 49%, representing a record for the company since the Novelis merger, and operating margin was 32.8%. The guidance for the June quarter includes expected revenues of $5 billion, gross margin of 49.5%, and operating margin of 33.5%. Lam's strategic focus is on expanding its served market and gaining market share through key technology inflections such as Gate All Around and advanced packaging. The company is also seeing growth in its Customer Support Business Group (CSBG), particularly in upgrades, despite headwinds in the Reliant segment. The overall industry forecast for calendar year 2025 WFE spending remains in the $100 billion range, with Lam confident in its ability to outperform semiconductor industry growth.

Lam Research Financial Statement Overview

Summary
Lam Research exhibits strong financial health with robust profitability margins, a solid balance sheet, and effective cash flow generation. The company's profitability and capital management are competitive in the industry, although revenue growth is moderate.
Income Statement
85
Very Positive
Lam Research shows robust profitability with a strong gross profit margin of 48.1% and net profit margin of 27.2% in TTM (Trailing-Twelve-Months). Revenue growth has been moderate at 15% compared to the previous annual period. The EBIT margin is solid at 30.9%, indicating efficient operational management. Despite the decline in revenue from the previous annual period, the company's profitability metrics remain strong, highlighting resilience in the semiconductor market.
Balance Sheet
78
Positive
The company's balance sheet is stable with a debt-to-equity ratio of 0.47, reflecting a balanced leverage position. Return on equity is impressive at 48.98%, suggesting effective use of shareholder funds. The equity ratio of 47.6% ensures a strong capital structure. The high ROE and manageable debt levels position Lam Research well within the industry, although the equity growth could be more aggressive.
Cash Flow
80
Positive
Lam Research demonstrates strong cash flow generation with a free cash flow to net income ratio of 0.94 in TTM. The free cash flow growth rate is 2.94%, indicating consistent cash generation. Operating cash flow to net income ratio stands at 0.96, showcasing efficient conversion of earnings to cash. Despite a decrease in operating cash flow from the previous period, the company maintains a healthy cash flow position, supporting its operational and strategic investments.
BreakdownTTMJun 2024Jun 2023Jun 2022Jun 2021Jun 2020
Income Statement
Total Revenue17.14B14.91B17.43B17.23B14.63B10.04B
Gross Profit8.24B7.05B7.78B7.87B6.81B4.61B
EBITDA5.83B4.91B5.64B5.72B4.79B2.94B
Net Income4.66B3.83B4.51B4.61B3.91B2.25B
Balance Sheet
Total Assets19.97B18.74B18.78B17.20B15.89B14.56B
Cash, Cash Equivalents and Short-Term Investments5.45B5.85B5.37B3.66B5.73B6.71B
Total Debt4.48B4.98B5.01B5.01B5.00B5.81B
Total Liabilities10.46B10.21B10.57B10.92B9.86B9.38B
Stockholders Equity9.51B8.54B8.21B6.28B6.03B5.18B
Cash Flow
Free Cash Flow4.09B4.26B4.68B2.55B3.24B1.92B
Operating Cash Flow4.48B4.65B5.18B3.10B3.59B2.13B
Investing Cash Flow-680.45M-370.61M-534.56M612.27M73.27M-244.08M
Financing Cash Flow-4.00B-4.00B-2.83B-4.58B-4.17B-623.93M

Lam Research Technical Analysis

Technical Analysis Sentiment
Positive
Last Price98.83
Price Trends
50DMA
83.58
Positive
100DMA
79.39
Positive
200DMA
77.81
Positive
Market Momentum
MACD
4.10
Negative
RSI
74.39
Negative
STOCH
93.51
Negative
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For LRCX, the sentiment is Positive. The current price of 98.83 is above the 20-day moving average (MA) of 92.22, above the 50-day MA of 83.58, and above the 200-day MA of 77.81, indicating a bullish trend. The MACD of 4.10 indicates Negative momentum. The RSI at 74.39 is Negative, neither overbought nor oversold. The STOCH value of 93.51 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for LRCX.

Lam Research Risk Analysis

Lam Research disclosed 30 risk factors in its most recent earnings report. Lam Research reported the most risks in the "Finance & Corporate" category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks

Lam Research Peers Comparison

Overall Rating
UnderperformOutperform
Sector (69)
Financial Indicators
Name
Overall Rating
Market Cap
P/E Ratio
ROE
Dividend Yield
Revenue Growth
EPS Growth
81
Outperform
$305.49B33.2955.21%0.97%16.46%21.29%
80
Outperform
$147.47B22.3736.37%1.00%6.12%-5.66%
80
Outperform
$124.33B27.0853.14%0.95%20.33%31.89%
AMAMD
80
Outperform
$220.69B99.773.90%21.71%99.00%
80
Outperform
$118.87B32.67104.10%0.84%20.44%44.14%
69
Neutral
¥229.55B14.487.64%2.71%9.13%8.50%
47
Neutral
$99.67B-18.66%2.19%-3.97%-562.40%
* Technology Sector Average
Performance Comparison
Ticker
Company Name
Price
Change
% Change
LRCX
Lam Research
98.83
-8.19
-7.65%
AMD
Advanced Micro Devices
138.52
-25.38
-15.49%
AMAT
Applied Materials
190.01
-51.02
-21.17%
ASML
ASML Holding
799.59
-263.55
-24.79%
INTC
Intel
21.88
-9.15
-29.49%
KLAC
KLA
921.10
75.64
8.95%

Lam Research Corporate Events

Shareholder Meetings
Lam Research Amends Bylaws for Shareholder Meetings
Neutral
May 21, 2025

On May 20, 2025, Lam Research Corporation’s Board of Directors amended the company’s bylaws to allow stockholders owning at least 20% of the company’s shares for over a year to call special meetings. This change aims to ensure stockholders receive timely and accurate information while preventing resource wastage from redundant meetings.

The most recent analyst rating on (LRCX) stock is a Buy with a $102.50 price target. To see the full list of analyst forecasts on Lam Research stock, see the LRCX Stock Forecast page.

Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.

Disclaimer

This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.Date of analysis: Jun 17, 2025