Lam Research (LRCX) AI Stock Analysis

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Lam Research

(NASDAQ:LRCX)

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Outperform 82 (OpenAI - 4o)

Rating:82Outperform

Price Target:

$122.00

▼(-4.93% Downside)

Lam Research's strong financial performance and positive earnings call are the most significant factors driving the score. The company's robust revenue growth, effective cost management, and technological advancements position it well in the semiconductor industry. Technical analysis supports a bullish trend, while valuation is moderate. Despite some challenges, the overall outlook remains positive.

Positive Factors

Revenue Growth

Record revenue growth indicates strong market demand and effective sales strategies, reinforcing Lam Research's competitive position in the semiconductor industry.

Technological Advancements

Technological leadership with innovations like Dextro cobots enhances operational efficiency and strengthens Lam's market position as a leader in semiconductor manufacturing technology.

Cash Flow Generation

Strong cash flow generation supports financial flexibility and investment capacity, enabling Lam Research to sustain growth and navigate industry cycles effectively.

Negative Factors

DRAM Revenue Decline

A decline in DRAM revenue indicates potential challenges in specific market segments, which could impact overall revenue diversification and growth prospects.

Projected Revenue Decline

Anticipated revenue decline suggests potential short-term challenges in market demand and pricing, which could affect financial performance and investor confidence.

Higher Tariffs Impact

Higher tariffs can increase costs and reduce competitiveness, potentially impacting profitability and market share in affected regions over the medium term.

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

Market Cap

$161.82B

Dividend Yield0.74%

Average Volume (3M)11.60M

Price to Earnings (P/E)30.9

Beta (1Y)1.98

Revenue Growth23.68%

EPS Growth43.16%

CountryUS

Employees18,600

SectorTechnology

Sector Strength88

IndustrySemiconductors

Share Statistics

EPS (TTM)1.33

Shares Outstanding1,261,032,300

10 Day Avg. Volume13,796,216

30 Day Avg. Volume11,596,511

Financial Highlights & Ratios

PEG Ratio0.54

Price to Book (P/B)12.69

Price to Sales (P/S)6.79

P/FCF Ratio23.12

Enterprise Value/Market Cap0.76

Enterprise Value/Revenue6.64

Enterprise Value/Gross Profit13.64

Enterprise Value/Ebitda18.90

Forecast

1Y Price Target

$115.80

Price Target Upside-9.76% Downside

Rating ConsensusStrong Buy

Number of Analyst Covering24

Lam Research Business Overview & Revenue Model

Company DescriptionLam Research Corporation designs, manufactures, markets, refurbishes, and services semiconductor processing equipment used in the fabrication of integrated circuits. The company offers ALTUS systems to deposit conformal films for tungsten metallization applications; SABRE electrochemical deposition products for copper interconnect transition that offers copper damascene manufacturing; SOLA ultraviolet thermal processing products for film treatments; and VECTOR plasma-enhanced CVD ALD products. It also provides SPEED gapfill high-density plasma chemical vapor deposition products; and Striker single-wafer atomic layer deposition products for dielectric film solutions. In addition, the company offers Flex for dielectric etch applications; Kiyo for conductor etch applications; Syndion for through-silicon via etch applications; and Versys metal products for metal etch processes. Further, it provides Coronus bevel clean products to enhance die yield; Da Vinci, DV-Prime, EOS, and SP series products to address various wafer cleaning applications; and Metryx mass metrology systems for high precision in-line mass measurement in semiconductor wafer manufacturing. The company sells its products and services to semiconductors industry in the United States, China, Europe, Japan, Korea, Southeast Asia, Taiwan, and internationally. Lam Research Corporation was incorporated in 1980 and is headquartered in Fremont, California.

How the Company Makes MoneyLam Research generates revenue primarily through the sale of its semiconductor manufacturing equipment, which includes systems for etching, deposition, and cleaning wafers, as well as related services and parts. The company earns significant income from both new equipment sales and the ongoing service and support of its installed systems, which are essential for maintaining the performance and efficiency of semiconductor production lines. Key revenue streams include system sales, service revenue from maintenance contracts, and aftermarket sales of consumables and spare parts. Strategic partnerships with major semiconductor manufacturers further enhance its market presence and contribute to its earnings, as these collaborations enable Lam Research to tailor its solutions to meet the evolving needs of its customers in a competitive landscape.

Lam Research Key Performance Indicators (KPIs)

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 rebounding strongly after a dip in 2023, with recent quarters showing a significant upward trend. This aligns with the company’s earnings call, highlighting record foundry revenues and strategic wins in advanced technology areas. However, the Customer Support segment faces challenges, with a mixed outlook due to declining Reliant Systems revenue. Despite potential tariff headwinds and DRAM revenue declines, Lam's strategic focus on advanced packaging and high-bandwidth memory positions it well for future growth, particularly in China, which now accounts for 35% of total revenue.

Data provided by:

Main Street Data

Lam Research Earnings Call Summary

Earnings Call Date:Jul 30, 2025

(Q4-2025)

% Change Since: |

Next Earnings Date:Oct 15, 2025

Earnings Call Sentiment Positive

The earnings call highlighted significant achievements in revenue growth, strong performance in the foundry segment, and technological advancements in advanced services. However, there were challenges such as a decline in DRAM revenue and an anticipated revenue decline in the December quarter due to mix and tariffs. Despite these challenges, the positive aspects of strong financial performance and technological leadership outweigh the negatives.

Q4-2025 Updates

Positive Updates

Record-Breaking Revenue and Growth

Lam Research achieved record revenue of $18.4 billion for the fiscal year 2025, with quarterly revenue reaching $5.17 billion, a 10% increase from the prior quarter. Gross margin reached a record 50.3%, the highest since the merger with Novellus.

Strong Performance in Foundry Segment

The foundry segment represented 52% of systems revenue, marking a second consecutive record quarter. Revenue from mature nodes and leading-edge processes drove this growth.

Impressive Upgrades Business Growth

The upgrades business reached a new high, with a mid-teens percentage increase over the prior quarter, driven by NAND technology conversions and customer migrations to higher layer count devices.

Advanced Services and Technology Leadership

Lam's advanced services, including the Dextro cobots, are realizing the vision of an autonomous fab, leading to enhanced tool-to-tool matching and improved machine availability.

Negative Updates

DRAM Revenue Decline

DRAM revenue declined to 14% of systems revenue, compared to 23% in the previous quarter, due to the timing of certain customer projects.

Projected Revenue Decline in December Quarter

Revenue is expected to decline in the December quarter, mirroring WFE trends and driven by a less favorable mix and higher tariffs.

Company Guidance

During the earnings call for the June 2025 quarter, Lam Research provided guidance for the upcoming September 2025 quarter, highlighting several key metrics and expectations. The company reported revenues of $5.17 billion for the June quarter, which marked an increase of 10% from the previous quarter, with a gross margin of 50.3%. They achieved a record revenue for the fiscal year 2025 at $18.4 billion and a gross margin of 48.8%. For the September 2025 quarter, Lam Research anticipates revenue of $5.2 billion, plus or minus $300 million, and expects gross margins to remain around 50%, plus or minus 1 percentage point. Earnings per share are projected at $1.20, plus or minus $0.10, with a share count of approximately 1.27 billion shares. Additionally, the company forecasted wafer fabrication equipment (WFE) spending for the calendar year 2025 to be around $105 billion, up from the previous estimate of $100 billion, primarily due to increased domestic China-related spending.

Lam Research Financial Statement Overview

Summary

Lam Research exhibits excellent financial health with strong revenue and profit growth, effective cost management, and robust cash flow generation. The balance sheet is healthy with manageable debt levels and strong equity, highlighting the company's strong position in the semiconductor industry.

Income Statement

Very Positive

Lam Research demonstrates strong revenue and profit growth, with Total Revenue increasing from $14.9B in 2024 to $18.4B in 2025, marking a 23.7% growth rate. Gross Profit Margin remains robust at approximately 48.7% for 2025. The Net Profit Margin improved to 29.1% in 2025 from 25.7% in 2024, indicating enhanced profitability. The EBIT and EBITDA margins are also high at 32% for 2025, reflecting efficient cost management and operational effectiveness.

Balance Sheet

Very Positive

The company maintains a healthy Debt-to-Equity ratio of 0.45 in 2025, showing prudent leverage management. Return on Equity (ROE) is impressive at 54.3%, indicating effective utilization of equity capital to generate profits. The Equity Ratio stands at 46.2%, suggesting a strong equity base supporting the company's asset structure.

Cash Flow

Very Positive

Lam Research's Cash Flow is robust, with Operating Cash Flow increasing significantly by 32.7% from 2024 to 2025. The Free Cash Flow also shows strong growth, improving by 45% in the same period. The Operating Cash Flow to Net Income Ratio is above 1, suggesting efficient conversion of earnings to cash. The Free Cash Flow to Net Income Ratio is also favorable, indicating strong cash generation capabilities relative to net income.

Breakdown	TTM	Dec 2025	Dec 2024	Dec 2023	Dec 2022	Dec 2021
Income Statement
Total Revenue	18.44B	18.44B	14.91B	17.43B	17.23B	14.63B
Gross Profit	8.98B	8.98B	7.05B	7.78B	7.87B	6.81B
EBITDA	6.48B	6.34B	4.91B	5.64B	5.71B	4.89B
Net Income	5.36B	5.36B	3.83B	4.51B	4.61B	3.91B
Balance Sheet
Total Assets	21.35B	21.35B	18.74B	18.78B	17.20B	15.89B
Cash, Cash Equivalents and Short-Term Investments	6.39B	6.39B	5.85B	5.37B	3.66B	5.73B
Total Debt	4.48B	4.48B	4.98B	5.01B	5.01B	5.00B
Total Liabilities	11.48B	11.48B	10.21B	10.57B	10.92B	9.86B
Stockholders Equity	9.86B	9.86B	8.54B	8.21B	6.28B	6.03B
Cash Flow
Free Cash Flow	5.71B	5.41B	4.26B	4.68B	2.55B	3.24B
Operating Cash Flow	6.17B	6.17B	4.65B	5.18B	3.10B	3.59B
Investing Cash Flow	-708.09M	-708.09M	-370.61M	-534.56M	612.27M	73.27M
Financing Cash Flow	-4.94B	-4.94B	-4.00B	-2.83B	-4.58B	-4.17B

Lam Research Technical Analysis

Technical Analysis Sentiment

Positive

Last Price128.33

Price Trends

50DMA

105.54

Positive

100DMA

97.17

Positive

200DMA

86.12

Positive

Market Momentum

MACD

7.70

Negative

RSI

74.50

Negative

STOCH

76.66

Neutral

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 128.33 is above the 20-day moving average (MA) of 114.22, above the 50-day MA of 105.54, and above the 200-day MA of 86.12, indicating a bullish trend. The MACD of 7.70 indicates Negative momentum. The RSI at 74.50 is Negative, neither overbought nor oversold. The STOCH value of 76.66 is Neutral, 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 (61)

Financial Indicators

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
LRCX	82 Outperform	$161.82B	30.90	58.24%	0.74%	23.68%	43.16%
ASML	81 Outperform	365.49B	36.26	53.44%	0.71%	27.09%	40.94%
KLAC	80 Outperform	141.02B	35.19	86.56%	0.68%	24.04%	49.69%
AMAT	76 Outperform	160.48B	24.02	35.03%	0.86%	6.70%	-5.95%
AMD	73 Outperform	261.08B	92.83	4.75%	―	27.17%	108.67%
INTC	63 Neutral	145.81B	-7.14	-20.95%	0.40%	-3.72%	-2120.70%
Sector *	61 Neutral	$37.18B	12.37	-10.20%	1.83%	8.50%	-7.62%

* Technology Sector Average

Performance Comparison

LRCX

Lam Research

128.13

46.29

56.56%

AMD

Advanced Micro Devices

161.27

-3.08

-1.87%

AMAT

Applied Materials

203.92

1.11

0.55%

ASML

ASML Holding

951.52

117.15

14.04%

INTC

Intel

33.99

10.08

42.16%

KLAC

KLA

1,064.29

289.37

37.34%

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: Sep 09, 2025