Lam Research Reports Record Q2 Earnings Amid Strong Semiconductor Demand
Written by Emily J. Thompson, Senior Investment Analyst
Updated: Jan 29 2026
0mins
Should l Buy LRCX?
Source: seekingalpha
Lam Research Corp's stock rose 5.10% in pre-market trading, reaching a 52-week high, following the announcement of record Q2 earnings.
The company reported a record revenue of $20.6 billion for fiscal year 2025, reflecting a 27% year-over-year increase that exceeded expectations, driven by strong demand in the semiconductor sector. Management remains optimistic about future growth, particularly in DRAM and advanced logic investments, as they anticipate the WFE market will reach $135 billion in 2026.
This strong performance reinforces Lam's market leadership and positions the company well for continued growth, especially amid the rapid development of AI technologies and increasing investments in semiconductor manufacturing.
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Analyst Views on LRCX
Wall Street analysts forecast LRCX stock price to fall over the next 12 months. According to Wall Street analysts, the average 1-year price target for LRCX is 192.50 USD with a low forecast of 142.00 USD and a high forecast of 265.00 USD. However, analyst price targets are subjective and often lag stock prices, so investors should focus on the objective reasons behind analyst rating changes, which better reflect the company's fundamentals.
22 Analyst Rating
18 Buy
4 Hold
0 Sell
Strong Buy
Current: 213.310
Low
142.00
Averages
192.50
High
265.00
Current: 213.310
Low
142.00
Averages
192.50
High
265.00
About LRCX
Lam Research Corporation is a global supplier of wafer fabrication equipment and services to the semiconductor industry. The Company designs, manufactures, markets, refurbishes, and services semiconductor processing equipment used in the fabrication of integrated circuits. Its products and services are designed to help its customers build devices that are used in a variety of electronic products, including mobile phones, personal computers, servers, wearables, automotive vehicles, and data storage devices. Its product families include ALTUS, SABRE, SPEED, Striker, VECTOR, Flex, Vantex, Kiyo, Versys Metal, Syndion, Coronus, and DV-Prime, Da Vinci, EOS, and SP Series. Its customer base includes semiconductor memory, foundries, and integrated device manufacturers that make products such as non-volatile memory, dynamic random-access memory, and logic devices. It offers services in areas, such as nanoscale applications enablement, chemistry, plasma and fluidics, and others.
About the author
Emily J. Thompson
Emily J. Thompson, a Chartered Financial Analyst (CFA) with 12 years in investment research, graduated with honors from the Wharton School. Specializing in industrial and technology stocks, she provides in-depth analysis for Intellectia’s earnings and market brief reports.
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- Strong Industry Performance: As of now, the PHLX Semiconductor Sector Index has risen by 12.5%, indicating a robust start for semiconductor stocks in 2026, which has captured investor interest and suggests potential industry recovery.
- Outstanding Company Gains: Micron Technology and Sandisk have surged by 47% and 193%, respectively, driven by strong demand for memory chips used in AI data centers and edge devices, highlighting the urgent market need for high-performance storage solutions.
- Lam Research Growth: Lam Research's revenue increased by 22% year-over-year in Q2 of fiscal 2026 to $5.34 billion, primarily benefiting from the surge in demand for memory manufacturing equipment, underscoring the company's vital role in the global memory market.
- Optimistic Future Outlook: Lam anticipates a 21% year-over-year revenue increase in 2026, with adjusted earnings expected to jump by 30%, and due to the ongoing memory shortage, it may exceed expectations, further solidifying its market-leading position.
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- Significant Revenue Growth: Lam Research reported a 22% year-over-year revenue increase in Q2 of fiscal 2026, reaching $5.34 billion, primarily driven by surging demand for memory chips, showcasing the company's robust performance in the semiconductor sector.
- Enhanced Profitability: The company's non-GAAP adjusted earnings rose nearly 40% year-over-year to $1.27 per share, reflecting its competitive advantage and sustained profitability in the memory manufacturing equipment market.
- Optimistic Market Outlook: Lam Research anticipates a 21% year-over-year revenue increase and a 30% jump in adjusted earnings for the current quarter, indicating substantial growth potential amid ongoing memory shortages.
- Increased Equipment Spending: The company expects wafer fabrication equipment spending to hit $135 billion in 2026, up 23% from last year, which will further drive its business growth and may exceed market expectations.
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- Strong Industry Performance: As of now, the PHLX Semiconductor Sector Index has risen by 12.5%, indicating a robust start for semiconductor stocks in 2026, which has captured investor interest and suggests potential industry recovery.
- Outstanding Company Gains: Micron Technology and Sandisk have surged by 47% and 193%, respectively, driven by strong demand for memory chips used in AI data centers and edge devices, highlighting the urgent market need for high-performance storage solutions.
- Lam Research Growth: Lam Research's revenue increased by 22% year-over-year in Q2 of fiscal 2026 to $5.34 billion, primarily benefiting from the surge in demand for memory manufacturing equipment, underscoring the company's vital role in the global memory market.
- Optimistic Future Outlook: Lam anticipates a 21% year-over-year revenue increase in 2026, with adjusted earnings expected to jump by 30%, and due to the ongoing memory shortage, it may exceed expectations, further solidifying its market-leading position.
See More
Memory Chip Demand Fuels Lam Research Growth
- Significant Revenue Growth: Lam Research reported a 22% year-over-year revenue increase in Q2 of fiscal 2026, reaching $5.34 billion, primarily driven by surging demand for memory chips, showcasing the company's robust performance in the semiconductor sector.
- Enhanced Profitability: The company's non-GAAP adjusted earnings rose nearly 40% year-over-year to $1.27 per share, reflecting its competitive advantage and sustained profitability in the memory manufacturing equipment market.
- Optimistic Market Outlook: Lam Research anticipates a 21% year-over-year revenue increase and a 30% jump in adjusted earnings for the current quarter, indicating substantial growth potential amid ongoing memory shortages.
- Increased Equipment Spending: The company expects wafer fabrication equipment spending to hit $135 billion in 2026, up 23% from last year, which will further drive its business growth and may exceed market expectations.
See More
U.S. Stocks Extend Losses, Led by Technology Sector Declines
- Technology Sector Decline: Qualcomm (QCOM) forecasts Q2 revenue between $10.2 billion and $11.0 billion, below the consensus of $11.18 billion, leading to a more than 9% drop in its stock and triggering a sell-off across the chip sector, exacerbating market anxiety.
- Weak Labor Market Signals: Challenger reports a staggering 117.8% year-over-year increase in job cuts for January, totaling 108,435, the highest since 2009, while initial jobless claims rose by 22,000 to 231,000, indicating a weakening labor market that could impact consumer confidence and spending.
- Fed Policy Implications: Fed Governor Lisa Cook supports the decision to hold interest rates steady, emphasizing the need to maintain credibility after nearly five years of above-target inflation, which may influence future monetary policy directions.
- Bitcoin Market Turmoil: Bitcoin (^BTCUSD) is down over 3% today, hitting a 1.25-year low and falling approximately 45% from its October record high, with about $5 billion pulled from Bitcoin ETFs over the past three months, reflecting waning market confidence in cryptocurrencies.
See More
US Stocks Close Mixed: Nasdaq Hits Seven-Week Low
- Chipmaker Sell-off: Advanced Micro Devices (AMD) plunged over 17% after analysts issued a weak Q1 sales forecast, raising concerns about AI demand and pressuring the broader tech sector, particularly high-flying stocks.
- Super Micro Computer Surge: Super Micro Computer's stock rose more than 13% after forecasting Q3 net sales of at least $12.3 billion, significantly above the consensus estimate of $10.25 billion, indicating strong growth potential in a competitive market.
- Mixed Economic Data: The January ADP employment change rose by 22,000, falling short of the expected 45,000, while the ISM services index remained unchanged at 53.8, exceeding expectations, reflecting the complexities of economic recovery that may influence future monetary policy.
- Improved Market Sentiment: Market sentiment improved following President Trump's signing of a government funding deal, although the agreement only funds the Department of Homeland Security through February 13, highlighting ongoing uncertainties in government operations.
See More
Mixed US Stock Market with Pressure on Chip Stocks
- Market Divergence: The S&P 500 Index fell by 0.11% while the Dow Jones Industrial Average rose by 0.69%, and the Nasdaq 100 dropped by 1.05%, indicating a divergence in market sentiment, particularly with underperforming tech stocks potentially affecting investor confidence.
- Earnings Impact: Super Micro Computer forecasts Q3 net sales significantly above expectations, leading to a stock price increase of over 13%, while Advanced Micro Devices saw its stock drop more than 15% due to weak Q1 sales forecasts, reflecting a cautious market outlook on tech stocks.
- Mixed Economic Data: The January ADP employment change rose by 22,000, below the expected 45,000, while the ISM services index remained steady at 53.8, stronger than the anticipated decline to 53.5, highlighting the complexities of economic recovery that could influence future monetary policy.
- Mortgage Applications Decline: MBA mortgage applications fell by 8.9% for the week ending January 30, with the purchase mortgage sub-index down 14.4%, indicating weakened housing demand that may negatively impact the real estate market.
See More
AI Stocks Drive New Market Boom
- Market Leader Risks: While Nvidia and OpenAI lead in generative AI applications, Nvidia faces challenges from competitors like AMD, and customers are increasingly looking to in-house semiconductor solutions, potentially impacting its market share.
- Manufacturing Competition: TSMC, the dominant third-party chip manufacturer, is encountering competition from a resurgent Intel, which has invested billions in its foundry business, while TSMC's capacity constraints add uncertainty to the market.
- ETF Investment Advantages: The VanEck Semiconductor ETF has performed excellently since its inception in 2011, particularly during the AI boom, with holdings like Nvidia and Micron reporting a 62% revenue growth, indicating strong long-term return potential for the fund.
- Growing Tech Demand: As technology advances, semiconductor demand is expected to continue rising, especially in cloud computing and smart devices, making the VanEck Semiconductor ETF a diversified investment option that provides exposure to international stocks.
See More
