LRCX changes
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- Price
- $253.82
- Discount category
- Below intrinsic value
- Next earnings
- 2027-01-21
- Next earnings is estimate
- Yes
- Company name
- Lam Research
- Sector
- Semiconductor equipment
- About
- Lam Research makes the equipment that chipmakers use to deposit and etch thin layers of material on wafers, and to clean wafers between steps. Its etch and deposition tools are used most in memory chips and in leading-edge logic chips. It also sells services, spare parts and upgrades for its installed base, and older equipment through its Reliant product line. In the quarter that ended on September 27, 2026, systems revenue was $5.73 billion and customer support-related revenue was $2.49 billion. Revenue for fiscal 2026, which ended on June 28, 2026, was $23.23 billion, up 26%. Its fiscal year ends on the last Sunday of June.
- Thesis
- The market prices Lam Research as a cyclical supplier at a high point of chip equipment spending, with a large exposure to China. Revenue rose 22% from the June quarter to a record $8.22 billion in the September 2026 quarter, and the operating margin reached 40.0%. But China gave 35% of revenue in that quarter, up from 26% in the June quarter. Lam said that investment in mature chip technology in China raised its foundry revenue in the quarter. U.S. export rules can cut these sales, and this spending in China can stop quickly. For the gap to close, three things must be true. Sales for memory and leading-edge logic must keep growing when sales to China fall. Gross margin must stay near the guided 52.5%. Revenue must stay near the $8.60 billion guidance for the December 2026 quarter and keep growing in 2027. The Q2 fiscal 2027 report, expected in late January 2027, is the next test. If these checks pass, the gap can close over the next four to six quarters. The main reason it may not close is a fall in spending by Chinese chipmakers or by memory makers, which can lower revenue and margins at the same time.
- Risks
- China gave 35% of revenue in the September 2026 quarter and 34% in fiscal 2026. U.S. export rules limit sales to many Chinese customers, and the government can add more limits. Spending in China on mature chip technology can stop quickly. Chip equipment spending is cyclical, and memory makers are large customers. If memory prices or AI spending fall, customers can cut orders quickly, and revenue and margins can fall together. Few customers buy most of Lam's equipment. In fiscal 2026, four customers gave about 16%, 15%, 12% and 12% of revenue. A delay by one of them can lower revenue for several quarters. China controls the export of rare earth elements that some Lam products use. These controls are suspended in part only until November 2026, unless they are extended.
- Balance sheet
- Cash: $7.4B Debt: $3.8B Net cash: $3.7B Interest cover: 89× Undrawn credit line: $2.0B, to January 2030 Debt due within 12 months: $0.0M Last debt due: 2060 Lam Research funds itself with senior unsecured notes. Principal was $3.75 billion at September 27, 2026, due from March 2029 to June 2060, after Lam repaid $750 million of 3.75% notes due March 2026. Cash and cash equivalents were $7.44 billion. Interest cover is GAAP operating income divided by interest expense for the September 2026 quarter. Lam has a $2.00 billion commercial paper program and a $2.00 billion revolving credit facility that backs it and runs to January 2030. Operating cash flow was $3.50 billion in the September 2026 quarter, and capital spending was $258 million. In the quarter, Lam paid about $1.02 billion for share buybacks and $325 million for dividends, and $3.03 billion of buyback authorization was left at September 27, 2026. As of 2026-09-27.
- Checkpoints
- Nov 2026: U.S. export rule for affiliates of listed parties. Pending. Watch: An extension of the suspension or no new loss of China sales passes; a return of the rule that cuts sales to more Chinese customers fails. Jan 21, 2027 (estimate): Q2 fiscal 2027 results: China share and margin. Pending. Watch: Revenue near the $8.60 billion guidance, gross margin near 52.5% and a lower China share without lower total revenue pass; revenue below the range or a sharp fall in China sales fail.
- Recent events
- 2026-10-21: Lam Research reported results for the September 2026 quarter. Revenue was a record $8.22 billion, up 22% from the June quarter. GAAP EPS was $2.19 and non-GAAP EPS was $2.20, and the GAAP operating margin was 40.0%. China gave 35% of revenue. In the quarter, Lam started accelerated share repurchases of $1.00 billion. For the December 2026 quarter, it guided revenue of $8.60 billion, plus or minus $400 million, and EPS of $2.33, plus or minus $0.15. 2026-08-24: Two directors, Sohail Ahmed and Michael Cannon, told Lam that they will retire from the board on November 2, 2026. The board will go from 12 to 10 directors. 2026-07-29: Lam Research reported results for the June 2026 quarter. Revenue was a record $6.72 billion, and GAAP EPS was $1.81. Revenue for fiscal 2026 was $23.23 billion, up 26%. 2026-04-22: Lam Research reported results for the March 2026 quarter. Revenue was $5.84 billion, and GAAP EPS was $1.45. 2026-02-03: Lam Research named Sesha Varadarajan Chief Operating Officer from March 6, 2026. He follows Pat Lord, who will retire. Karthik Rammohan took a larger role over global operations. 2026-01-28: Lam Research reported results for the December 2025 quarter. Revenue was $5.34 billion, and GAAP EPS was $1.26.