Lam Research (LRCX) AI Stock Analysis

• Market Cap: $261.97B
• Dividend Yield: 0.56%
• Average Volume (3M): 10.95M
• Price to Earnings (P/E): 47.2
• Beta (1Y): 2.06
• Revenue Growth: 25.66%
• EPS Growth: 46.68%
• Country: US
• Employees: 18,600
• Sector: Technology
• Sector Strength: 88
• Industry: Semiconductors
• EPS (TTM): 1.27
• Shares Outstanding: 1,248,771,000
• 10 Day Avg. Volume: 13,286,407
• 30 Day Avg. Volume: 10,953,060
• PEG Ratio: 0.54
• Price to Book (P/B): 12.69
• Price to Sales (P/S): 6.79
• P/FCF Ratio: 23.12
• Enterprise Value/Market Cap: 0.99
• Enterprise Value/Revenue: 12.66
• Enterprise Value/Gross Profit: 25.42
• Enterprise Value/Ebitda: 34.70
• 1Y Price Target: $282.81
• Price Target Upside: 34.81% Upside
• Rating Consensus: Strong Buy
• Number of Analyst Covering: 27
• EPS Forecast (FY): N/A
• Revenue Forecast (FY): N/A

• Rating: 80 Outperform
• Price Target: $273.00 ▲(30.14% Upside)

The score is driven by strong financial performance (robust margins, free cash flow, and improving leverage) and bullish technical momentum (price above key moving averages with positive MACD). Offsetting factors are a demanding valuation (high P/E and low yield) and, to a lesser extent, cyclical and mix/capacity risks highlighted in the latest guidance.

Positive Factors

High Profitability and Margins

Lam's sustained ~49% gross and ~30% net margins reflect durable pricing power and efficient manufacturing for etch/deposition tools. High margins support ongoing R&D, capital investment and shareholder returns, providing resilience and earnings quality across equipment cycles.

Strong Cash Generation and Capital Return

Robust FCF (~$6.7B TTM) with disciplined capital returns and cash of ~$6.2B signals durable cash conversion. Lowing leverage (debt/equity ~0.44) and stated intent to return ≥85% of FCF give flexibility to fund buybacks, debt paydown and targeted capex while preserving financial stability over multiple cycles.

Product Leadership & SAM Expansion

Material product wins (Aqara conductor etch, EUV, high‑aspect‑ratio etch) and SAM/share gains into the mid‑30s underpin a structural competitive advantage. Combined with targeted R&D and partnerships, this cements tooling leadership across advanced packaging, HBM and foundry segments for sustained market share gains.

Negative Factors

Cyclical Industry Revenue Swings

Lam operates in a historically cyclical WFE market with multi‑year revenue swings and a down year in 2024. This cyclicality creates durable volatility in revenue, capacity utilization and return on invested capital, complicating forecasting and making multi‑quarter performance lumpy.

Clean‑Room Capacity Constraints

Widespread sold‑out clean‑room capacity is a structural supply constraint that can defer equipment installations and revenue recognition. Even with strong market demand forecasts, constrained fab space can bottleneck growth, delay customer ramps and reduce visibility into timing of revenue realization over the next several quarters.

China Revenue and Mix Volatility

Significant sequential swings in China exposure (43% to 35%) and an expected flat China WFE create durable regional mix risk. Geographic concentration and affiliate/timing effects can materially alter gross margins, product mix and growth cadence, adding geopolitical and demand uncertainty to long‑term planning.

Lam Research Business Overview & Revenue Model

Company Description

Lam 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 Money

Lam Research generates revenue primarily through the sale of its semiconductor manufacturing equipment and related services. The company's revenue model is primarily based on two key streams: equipment sales and service agreements. Equipment sales consist of the direct sale of its advanced etching and deposition systems, which are essential for the fabrication of semiconductor wafers. Additionally, Lam Research earns substantial revenue from service agreements, which include maintenance, upgrades, and support services for its equipment installed at customer sites. The company benefits from long-term relationships with major semiconductor manufacturers, which often leads to repeat business and contracts. Furthermore, partnerships with leading technology companies in the semiconductor industry enhance Lam Research's market position and contribute to its earnings through collaborative innovations and shared technology advancements.

Lam Research Financial Statement Overview

Summary

High-quality profitability and cash generation: ~49% gross margin and ~30% net margin with strong free cash flow (~$6.7B) and improving leverage (debt-to-equity down to ~0.44). Main constraint is cyclicality, with prior multi-year revenue swings tempering the otherwise strong fundamentals.

Income Statement

Lam Research shows strong profitability and healthy margins in TTM (Trailing-Twelve-Months), with gross margin around 49% and net margin near 30%, indicating solid pricing power and cost control. Earnings power is strong as operating profit remains in the mid-30% range. Growth has re-accelerated in TTM (Trailing-Twelve-Months) (about 5% revenue growth) after a down year in 2024, but the multi-year revenue trend is cyclical (notably the 2024 decline), which tempers the score despite excellent profitability.

Balance Sheet

Leverage looks manageable and improving: debt-to-equity declines from roughly 0.80–0.83 (2021–2022) to ~0.44 in TTM (Trailing-Twelve-Months), supported by a higher equity base. Returns on equity are exceptionally high (TTM (Trailing-Twelve-Months) ~61%), reflecting strong profitability, though it can also be amplified by the capital structure. Overall balance sheet risk appears moderate, with the main watch-out being that the business operates in a cyclical industry where profits and asset utilization can swing.

Cash Flow

Cash generation is a clear strength: TTM (Trailing-Twelve-Months) free cash flow is strong (~$6.7B) and growing (~14%), indicating improving cash conversion. Free cash flow tracks net income well (TTM (Trailing-Twelve-Months) ~0.92x), suggesting earnings quality is solid. Operating cash flow runs slightly below net income in TTM (Trailing-Twelve-Months) (~0.95x), which is not alarming but is a minor detractor versus years where cash flow more clearly exceeded earnings.

Breakdown	Dec 2025	Dec 2024	Dec 2023	Dec 2022	Dec 2021
Income Statement
Total Revenue	18.44B	14.91B	17.43B	17.23B	14.63B
Gross Profit	8.98B	7.05B	7.78B	7.87B	6.81B
EBITDA	6.34B	4.91B	5.64B	5.71B	4.89B
Net Income	5.36B	3.83B	4.51B	4.61B	3.91B
Balance Sheet
Total Assets	21.35B	18.74B	18.78B	17.20B	15.89B
Cash, Cash Equivalents and Short-Term Investments	6.39B	5.85B	5.37B	3.66B	5.73B
Total Debt	4.76B	4.98B	5.01B	5.01B	5.00B
Total Liabilities	11.48B	10.21B	10.57B	10.92B	9.86B
Stockholders Equity	9.86B	8.54B	8.21B	6.28B	6.03B
Cash Flow
Free Cash Flow	5.41B	4.26B	4.68B	2.55B	3.24B
Operating Cash Flow	6.17B	4.65B	5.18B	3.10B	3.59B
Investing Cash Flow	-708.09M	-370.61M	-534.56M	612.27M	73.27M
Financing Cash Flow	-4.94B	-4.00B	-2.83B	-4.58B	-4.17B

Lam Research Technical Analysis

• Technical Analysis Sentiment: Neutral
• Last Price: 209.78
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Positive
• RSI: Neutral
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For LRCX, the sentiment is Neutral. The current price of 209.78 is below the 20-day moving average (MA) of 222.79, above the 50-day MA of 189.15, and above the 200-day MA of 128.85, indicating a neutral trend. The MACD of 11.73 indicates Positive momentum. The RSI at 48.11 is Neutral, neither overbought nor oversold. The STOCH value of 38.29 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Neutral sentiment for LRCX.

Lam Research Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
LRCX	80 Outperform	$261.97B	47.16	65.56%	0.56%	25.66%	46.68%
ASML	78 Outperform	$514.27B	50.00	51.52%	0.63%	24.91%	39.95%
KLAC	78 Outperform	$171.35B	39.38	100.73%	0.58%	22.27%	45.32%
AMAT	77 Outperform	$235.98B	36.79	35.51%	0.69%	4.47%	0.48%
ASX	69 Neutral	$41.82B	37.32	11.16%	2.29%	8.01%	10.41%
STM	64 Neutral	$25.62B	146.17	0.93%	1.28%	-17.33%	-76.71%
Sector *	61 Neutral	$37.18B	12.37	-10.20%	1.83%	8.50%	-7.62%

Lam Research Corporate Events

Lam Research Announces Board Addition and COO Transition

On February 3, 2026, Lam Research appointed Cadence Design Systems CEO Anirudh Devgan to its board of directors and to the board’s Innovation and Technology Committee, expanding the board by one seat. Devgan, a prominent figure in electronic design automation with deep expertise in AI-driven design, semiconductor ecosystem technologies and computational software, is expected to bolster Lam’s strategic and technology oversight as it seeks to accelerate innovation in enabling next-generation chips. On the same day, the company announced that long-time executive and chief operating officer Patrick J. Lord will retire effective March 6, 2026, after more than two decades with Lam and Novellus, and that veteran executive Seshasayee (Sesha) Varadarajan, currently senior vice president of the Global Products Group and a long-serving leader in Lam’s and Novellus’ deposition and PECVD/Electrofill businesses, will succeed him as executive vice president and chief operating officer, signaling a planned leadership transition built around internal operational continuity and deep process-engineering experience.

The most recent analyst rating on (LRCX) stock is a Buy with a $280.00 price target. To see the full list of analyst forecasts on Lam Research stock, see the LRCX Stock Forecast page.

Lam Research Approves New Stock Incentive Plan

On November 4, 2025, Lam Research Corporation held its annual meeting of stockholders, where key decisions were made, including the approval of a new equity incentive plan, the 2025 Stock Incentive Plan. Additionally, an amendment to the company’s Restated Certificate of Incorporation was approved, limiting the liability of certain officers as permitted by Delaware law. These changes, along with the election of directors and other proposals, reflect Lam Research’s strategic efforts to enhance corporate governance and align executive compensation with shareholder interests.

The most recent analyst rating on (LRCX) stock is a Buy with a $172.00 price target. To see the full list of analyst forecasts on Lam Research stock, see the LRCX Stock Forecast page.