Holding · 1.3% · hold (from 1.3%) · mega · Technology · last 323.86
Entry 310.00–325.00 · Stop 295.00 · Target 365.00 · Hold (on target)
Four straight earnings beats and it has reclaimed its moving averages. Small position; no add given the chip concentration.
Thesis (long, position, conviction 60)
Bull: Lam is putting up genuinely strong numbers: quarterly revenue +23.8% YoY to $5.84B with operating income +31.1% and net income +37.2% (F-LRCX-4/5/6), calendar-2025 revenue +26% YoY to $23.23B (F-LRCX-7), and the last four reported quarters have all beaten EPS estimates, including a 5.99% beat last quarter (F-LRCX-8/9) — margins are expanding, not just top-line growth. Wall Street is uniformly positive: 35 of 41 analysts rate it buy/strong buy with zero sells (F-LRCX-10). Technically, the stock just staged a decisive move, closing up ~3% and reclaiming all three key moving averages (20/50/200-day) with RSI at a healthy, non-overbought 59.7 (F-LRCX-1/2), suggesting the prior correction (stock is still 25% off its 52-week high, F-LRCX-3) may be turning into a new uptrend backed by fundamentals rather than a low-quality bounce. Next earnings on 2026-10-21 (analyst est. EPS $2.22, revenue $8.31B) is a near-term catalyst that, given the recent beat streak, has reasonable odds of another positive surprise.
Bear: Despite the bounce, LRCX has badly underperformed the market over three months (ret_3m -25.18%, RS vs SPY -27.77%), which points to real sector-level pressure (semicap capex digestion, China export-control exposure, memory-cycle timing) that a single up day doesn't erase. Trailing P/E of 56.3x is expensive on an absolute basis (F-LRCX-11); even the more favorable forward P/E of 27.6x prices in a lot of continued acceleration, and any wobble in AI/memory capex guidance at the 10/21 print could reset expectations sharply given how far the stock had fallen and how quickly it's snapped back. The brief also flags no confirmed company forward outlook to cross-check against the analyst estimates (data gap), so the bull case currently rests on trailing beats and sell-side sentiment alone.
Valuation: Rich on a trailing basis (56.3x) but more reasonable on forward estimates (27.6x) against ~26-37% YoY growth in revenue/earnings, implying roughly a PEG near 1 if growth persists — not cheap, but not indefensible for a mega-cap semicap equipment name riding an AI/memory capex upcycle. The valuation case depends on the growth beats continuing; a deceleration would leave the stock looking expensive fast.
Catalysts
2026-10-21: Q1 FY2027 earnings report (analyst est. EPS $2.22, revenue $8.31B); fourth consecutive beat would reinforce the momentum thesis
2026-11-03: Virtual annual stockholders meeting
Facts
F-LRCX-1: LRCX closed at $323.86 on 2026-09-29, up 2.99% from the prior close. (as of 2026-09-29)[E2583]
F-LRCX-2: At the 2026-09-29 close, the share price was above its 20-day ($297.94), 50-day ($304.66), and 200-day ($271.99) moving averages. (as of 2026-09-29)[E2584]
F-LRCX-3: As of 2026-09-29, the stock was 25.18% below its 52-week closing high; its 1-month return was 7.39% and its 6-month return was 62.27%. (as of 2026-09-29)[E2584]
F-LRCX-4: Revenue for the quarter ended 2026-03-29 was $5.84 billion, up 23.8% from $4.72 billion for the quarter ended 2025-03-30. (as of 2026-03-29)[E2585]
F-LRCX-5: Operating income for the quarter ended 2026-03-29 was $2.05 billion, up 31.1% from $1.56 billion for the quarter ended 2025-03-30. (as of 2026-03-29)[E2585]
F-LRCX-6: Net income for the quarter ended 2026-03-29 was $1.83 billion, up 37.2% from $1.33 billion for the quarter ended 2025-03-30. (as of 2026-03-29)[E2585]
F-LRCX-7: Calendar-year 2025 revenue was $23.23 billion, up 26.0% from $18.44 billion in calendar-year 2024. (as of 2025-12-31)[E2772]
F-LRCX-8: Lam reported diluted EPS of $1.82 for the quarter ended 2026-06-30, above the $1.7172 estimate by 5.99%. (as of 2026-06-30)[E2771]
F-LRCX-9: The four most recent reported quarterly EPS results in the data each exceeded estimates, including the quarter ended 2025-09-30 by 1.09%, 2025-12-31 by 6.41%, 2026-03-31 by 4.93%, and 2026-06-30 by 5.99%. (as of 2026-06-30)[E2771]
F-LRCX-10: The September 2026 analyst recommendation tally was 10 strong buys, 25 buys, 6 holds, and no sells or strong sells. (as of 2026-09-01)[E2607]
F-LRCX-11: The data report a trailing P/E of 56.32 and a forward P/E of 27.59 as of 2026-09-29. (as of 2026-09-29)[E2585]
F-LRCX-12: Lam's 2026 proxy statement set its virtual annual meeting for 2026-11-03 at 9:30 a.m. Pacific Time. (as of 2026-09-24)[E2770]source
What would change the view
A close below $295 (below 50-day and 20-day MAs) shortly after entry, signaling the breakout failed
An EPS or revenue miss at the 2026-10-21 print, breaking the 4-quarter beat streak
Forward guidance implying revenue growth decelerating meaningfully below the current ~24-26% trend
Renewed underperformance vs SPY over the following month, re-confirming the prior 3-month relative weakness
Data quality
Quality score 100/100.
Gap: The available earnings materials do not provide a confirmed release time for the expected 2026-10-21 earnings date.
Gap: The supplied data do not include a recent company-issued forward outlook to compare with analyst estimates.