Lam Research (NASDAQ:LRCX) shares recover after company projects $8.1 billion, beating forecasts

NEW YORK, July 29, 2026, 18:04 EDT – Lam Research NASDAQ:LRCX stock bounced back on Tuesday, after the firm’s $8.1 billion forecast exceeded analysts’ expectations.

In after-hours trading, shares rose 2.6% to $259. During the regular session, they declined 6.4%.
The September revenue outlook came in 14.2% higher than the analyst consensus gathered by LSEG LON:LSEG.
Support revenue increased by 43%, exceeding the 24% growth in systems.

Lam Research stock climbed following the end of Wednesday’s regular trading. Investors focused on a strong September forecast despite a modest beat in June revenue. U.S. cash markets had closed, but after-hours trading was still underway.

The primary surprise came from the outlook rather than the quarter’s reported results. Lam’s revenue midpoint was set at $8.10 billion, which is 14.2% higher than consensus. This midpoint indicates sequential growth of 20.5%.

June revenue surpassed forecasts by just 0.8%. Adjusted earnings were 8.3% above consensus. This indicates analysts misjudged the pace of the current recovery in spending.

Measure	Lam result or midpoint	Analyst consensus	Variance
June revenue	$6.72 billion	$6.67 billion	+0.8%
June adjusted EPS	$1.82	$1.68	+8.3%
September revenue	$8.10 billion	$7.09 billion	+14.2%
September adjusted EPS	$2.15	$1.83	+17.5%

The table reflects Lam’s stated numbers and LSEG projections. The figures for September are based on preliminary company outlook, rather than final reported earnings. Lam noted that actual outcomes may differ significantly.

Broader demand expectations have also increased. Lam currently forecasts wafer-fabrication equipment spending in 2026 to be in the low $150 billion range. In its previous estimate three months ago, the company cited $140 billion with an upside bias. The updated baseline is at least 7% above that earlier figure.

Higher revenues boosted margins. Adjusted operating margin for June rose to 38.4%, an increase of 340 basis points from the previous quarter. The early outlook for September puts the midpoint at 39.5%, indicating a further rise of 110 basis points.

Sales from the installed base served as a second support. Revenue related to support climbed 43% year-on-year, totaling $2.47 billion. Systems revenue advanced 24% to $4.25 billion.

This brought support to 36.8% of total sales, up from 33.5% the previous year. The mix shows growth is expanding past just new leading-edge tool shipments.

Support revenue covers services, spare parts, upgrades, and mature-node equipment. This segment helps stabilize sales between large fabrication projects, tying growth to Lam’s growing installed base.

Chief Executive Tim Archer said, “AI-driven demand continues to reshape the semiconductor industry.” Lam reported that NAND revenue more than doubled from the previous quarter. Early estimates from management indicate that advanced-packaging revenue will climb over 70% in this calendar year. Lam Research Newsroom

Asia continues to represent the bulk of geographic exposure. In the June quarter, Taiwan accounted for 27% of revenue, China contributed 26%, and Korea made up 20%. Combined, these three markets represented close to 75% of total sales.

Revenue for fiscal 2026 climbed 26% to $23.23 billion, with adjusted earnings up 41% at $5.82 per share. Guidance for September signals an acceleration in growth as the new fiscal year begins.

Investor sentiment ahead of the report remained subdued. Lam shares dropped 21% across the five sessions ending Wednesday. Trading at $259 after hours, the stock stayed roughly 19% under its July 22 close.

The coming week will challenge the revised outlook. Thursday’s normal trading will provide the first complete liquidity reading. The early recovery clawed back just a small part of the latest drop.

Risks persist. Export limits, tariffs, supply shortages and timing from customers can delay shipments. By Wednesday’s close, Lam was still trading at close to 48 times its trailing earnings.

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Further analysis

Editorial insight

How did LRCX shares perform today?

Lam Research ended the session on July 29 at $252.35, a decline of 6.4%. The S&P 500 slipped 1.5%, but chip-equipment stocks suffered sharper falls. Following its earnings release, shares recovered some lost ground in after-hours trading. By 6:00 p.m. ET, LRCX was near $262.50, rising 4.0% post-market. Even at those levels, the stock was still about 40% lower than the $438.50 high reached in June. After-hours pricing can remain volatile. The Wall Street Journal

Did Lam Research surpass forecasts for its fiscal fourth quarter?

Revenue totaled $6.72 billion, topping consensus expectations of roughly $6.66–$6.67 billion. Adjusted EPS was $1.82, compared with forecasts of $1.68–$1.69. That represents a revenue beat of about 1% and an 8% beat on EPS. Sales climbed 30% year-on-year, and adjusted EPS gained 37%. Non-GAAP gross margin stood at 52.0%, with operating margin at 38.4%. Management described revenue, operating margin and EPS as record-highs for the company. Lam Research Investor Relations

What is the strength of the guidance for the September quarter?

Lam projected September-quarter revenue of $8.10 billion, with a range of plus or minus $400 million. The company expects adjusted EPS to reach $2.15, with a margin of plus or minus $0.15. FactSet issued a pre-report consensus of $7.11 billion in revenue and $1.84 per share, while LSEG cited $7.09 billion and $1.83, slightly below FactSet. These guidance figures come in approximately 14% and 17% above those respective estimates. At the midpoint, revenue is expected to increase about 20.5% from the previous quarter. Guidance for gross margin is 52.0%, and operating margin is set at 39.5%. Lam Research Investor Relations

What factors are contributing to Lam Research’s expansion?

In June, systems revenue consisted of 46% from memory, divided between DRAM and nonvolatile memory. The foundry segment made up 44%, with logic and other applications providing 10%. According to Lam, NAND revenue saw a two-fold sequential increase during the quarter. Revenue from customer support totaled $2.47 billion, accounting for close to 37% of sales and marking a 43% annual rise. Advanced-packaging revenue is projected to climb over 70% this year. Management forecasts 2026 wafer-fabrication equipment spending to be in the low $150 billion range. Growing AI investment is pushing demand for storage, DRAM, foundry, and packaging.

What level of risk from China persists?

China accounted for 26% of revenue in the June quarter, compared to 34% in March. Taiwan represented a somewhat higher share at 27%, and Korea provided 20%. The reduced proportion from China lessens revenue concentration but risk persists. Lam names export controls, tariffs, and trade friction as significant risks to sales. State-backed Chinese memory firms are quickly increasing production. Shifts in policy remain difficult to predict.

What is the level of strength for cash flow and shareholder returns?

Operating cash flow for the June quarter stood at $1.46 billion, with capital expenditures amounting to $189 million. This resulted in approximately $1.27 billion in free cash flow. Lam closed the quarter holding $5.60 billion in cash and restricted cash, and long-term debt was around $3.73 billion, giving the company gross cash in excess of debt. Lam allocated $246 million to share repurchases and paid out $325 million in dividends. Repurchases for the full year reached $3.85 billion, while dividends totaled $1.27 billion. At Wednesday’s close, the dividend yield on an annualized basis was roughly 0.4%. Lam Research Investor Relations

Is LRCX undervalued following the decline?

LRCX closed at $252.35, reflecting a multiple of about 43.4 times its projected fiscal-2026 adjusted EPS of $5.82. Shares moved to $262.50 in after-hours trading, lifting the multiple to around 45.1 times. Analysts had expected fiscal-2027 EPS at $8.22 before results, equating to approximately 31.9 times earnings based on the after-hours share price. Revenue for the fiscal year increased 26%, with adjusted EPS up 41%. The stock’s valuation has come down but remains above traditional value metrics.

What is the projected price for LRCX over the next 12 months?

Consensus 12-month price targets are concentrated between $372 and $385, but sources vary. Published lows span $220 to $290, with highs up to $500. Based on the $262.50 starting level, these averages suggest 42%–47% potential upside, though most estimates are from before earnings. My central scenario sits in a $280–$340 range, with a midpoint close to $310. This outlook factors in projected fiscal-2027 adjusted EPS of $8.20–$9.00 and a 34–38 multiple. A bullish outcome could see $380–$420, while in a cyclical downturn, a drop to $210–$240 is possible. These are indicative scenarios, not predictions. Yahoo Finance

Which price points and potential triggers are important going forward?

Investors should monitor whether $250.50 serves as near-term support. Initial resistance appears near $269–$276, reflecting recent price action. Next reference points on the close lie at $291.61 and $305.21. Analyst revisions following the earnings call are the primary near-term catalyst. Attention should then shift to September shipment figures, margin performance at 39.5%, capital expenditures across the industry, and regulations in China. Any miss on guidance may lead to a rapid contraction in the forward multiple. The Wall Street Journal

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Khadija Saeed is a financial markets reporter at TS2.tech, specializing in stocks, technology and emerging industries. She studied economics and finance at the London School of Economics and previously worked in market research before moving into financial journalism. Her coverage focuses on the companies, innovations and economic trends influencing global investors. Follow Khadija Saeed on Google News.