Lam Research shares advanced nearly 3% on Tuesday during a rebound in semiconductor stocks. Benzinga Pro data showed Lam trading at $233.44, up 2.58%, at publication on Tuesday. Rival equipment suppliers KLA, Applied Materials and ASML also participated in the rebound. Technology stocks advanced 1.32%. The S&P 500 gained 0.24%. Lam shares have gained over 36% in 2026, compared with over 50% for the PHLX Semiconductor Index.
Investors continued to assess Lam's record September-quarter performance, stronger-than-expected guidance and supply constraints that restricted near-term upside. Lam announced fiscal first-quarter revenue of $8.22 billion in October, exceeding consensus of $8.15 billion. Adjusted earnings reached $2.20 per share, compared with an estimate of $2.18. CEO Tim Archer credited AI-related semiconductor demand and increasing device complexity with helping Lam achieve records in revenue, profit and earnings per share. Gross margin set a record at 52.4%. Operating margin surpassed 40% for the first time. Free cash flow reached a record $3.24 billion. Lam increased the quarterly dividend by 27% to 33 cents.
Lam forecast second-quarter revenue between $8.2 billion and $9.0 billion, placing the $8.6 billion midpoint slightly above consensus. Lam projected adjusted earnings between $2.18 and $2.48 per share, against analysts' estimate of $2.31. Management said component shortages postponed some December-quarter shipments, which should move into the March quarter. China accounted for 35% of September revenue. Management expects China's contribution to fall meaningfully in December because domestic spending in China is slowing.
Cantor Fitzgerald analyst C.J. Muse kept an Overweight rating and a $500 price forecast, with Lam remaining a Top Pick at Cantor. Muse described the results and guidance as solid, although the outlook did not meet more ambitious buy-side expectations. Muse argued that supply limitations, not weakening demand, were restricting Lam's near-term revenue. Cantor highlighted management's preliminary projection of roughly $200 billion in wafer-fab-equipment spending for 2027, compared with about $155 billion in 2026. Muse's model puts spending at $215 billion. Industry checks indicate spending could reach $225 billion. Muse increased the 2027 earnings estimate to $10.75 per share from $10.25. Muse expects Lam's tool business to expand about 50% in 2026, compared with roughly 40% growth across the industry.
Other analysts retained positive ratings while lowering price targets after the results. Needham analyst Charles Shi retained Buy but reduced the target from $390 to $290. Mizuho analyst Vijay Rakesh retained Outperform but lowered the target from $365 to $360. Morgan Stanley analyst Shane Brett retained Overweight but reduced the target from $385 to $339.
Jim Cramer said on CNBC's "Mad Money" that Cramer favors Lam over KLA. However, Cramer warned that semiconductor-equipment stocks were still undergoing a steep selloff and said Cramer would await clearer stabilization before buying aggressively.
Lam Research Stock Rises 3% Amid Semiconductor Sector Rebound
BenzingaShare
Summary
Lam Research (NASDAQ:LRCX) shares climbed 2.58% to $233.44 as the semiconductor sector rebounded, with the fear and greed index showing improved market sentiment. The company reported Q1 revenue of $8.22 billion, beating forecasts, and boosted its quarterly dividend by 27%. Rivals KLA, Applied Materials, and ASML also gained. Cantor Fitzgerald kept an Overweight rating with a $500 target, while others cut price forecasts. The recent crypto price movements may have influenced broader market risk appetite.
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