Lam Research Corporation (LRCX) | Investment Case

1. Company Snapshot

1.a. Company Description

Lam Research Corporation designs, manufactures, markets, refurbishes, and services semiconductor processing equipment used in the fabrication of integrated circuits.The company offers ALTUS systems to deposit conformal films for tungsten metallization applications; SABRE electrochemical deposition products for copper interconnect transition that offers copper damascene manufacturing; SOLA ultraviolet thermal processing products for film treatments; and VECTOR plasma-enhanced CVD ALD products.It also provides SPEED gapfill high-density plasma chemical vapor deposition products; and Striker single-wafer atomic layer deposition products for dielectric film solutions.

In addition, the company offers Flex for dielectric etch applications; Kiyo for conductor etch applications; Syndion for through-silicon via etch applications; and Versys metal products for metal etch processes.Further, it provides Coronus bevel clean products to enhance die yield; Da Vinci, DV-Prime, EOS, and SP series products to address various wafer cleaning applications; and Metryx mass metrology systems for high precision in-line mass measurement in semiconductor wafer manufacturing.The company sells its products and services to semiconductors industry in the United States, China, Europe, Japan, Korea, Southeast Asia, Taiwan, and internationally.

Lam Research Corporation was incorporated in 1980 and is headquartered in Fremont, California.

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1.b. Last Insights on LRCX

Breaking News: Lam Research Corporation recently reported record financial performance in calendar 2025, driven by AI-related semiconductor demand. The company's December 2025 quarter earnings call highlighted results that came in ahead of guidance, with gross margin, operating margin, and earnings per share exceeding expectations. Institutional investors are showing confidence in the company, with Mediolanum International Funds Ltd and Fortem Financial Group LLC increasing their holdings by 52.0% and 14.4% respectively. Analysts at various firms recommend a buy, citing the company's strong momentum and growth prospects.

1.c. Company Highlights

Last Price	237.5
Change Percentage	1.73%
Open	233.33
Previous Close	233.46
Market Cap ( Millions)	296583
Volume	13197097
Year High	251.87
Year Low	56.32
M A 50	184.27
M A 200	126.73

FCF Yield	2.25%
Dividend Yield	0.41%
ROE	62.59%
Debt / Equity	44.19%
Net Debt / EBIDTA	-22.83%
Price To Book	29.49
Price Earnings Ratio	48.15
Price To FCF	44.52
Price To sales	14.42
EV / EBITDA	39.68

2. Lam Research Corporation's Record Revenues and Growth Outlook

Lam Research Corporation reported record revenues of $20.6 billion in 2025, up 27% year-over-year, with a gross margin of 49.9% and diluted earnings per share of $1.27, surpassing estimates of $1.17. In the December quarter, revenue was a record $5.34 billion, with gross margin, operating margin, and earnings per share all exceeding the high end of guidance. The company's strong performance was driven by strength in foundry, with investments at the leading edge and mature node spending in China, and record DRAM revenue.

Publication Date: Feb -01

                                    📋 Highlights
                                    2025 Record Revenue::
                                                Lam Research reported $20.6B revenue (up 27% YoY) with 49.9% gross margin and $4.89 EPS (up 49% YoY).
December Quarter Outperformance::
                                                Revenue hit $5.34B, with gross margin, operating margin, and EPS exceeding high-end guidance.
2026 WFE Guidance::
                                                Expected $135B in wafer fab equipment (WFE), driven by AI, DRAM, and advanced packaging growth (+40% in advanced packaging).
Foundry Growth Acceleration::
                                                Foundry revenue surged 100% YoY, fueled by leading-edge node spending in China and mature node investments.
China Revenue Shift::
                                                China contributed 35% of December revenue (down from prior periods), with flat 2026 growth expected as global demand expands.

                                

Segment Performance and Outlook

The company saw significant growth in its foundry business, driven by leading-edge foundries accelerating their roadmaps, particularly with the introduction of new technologies such as backside power and advanced packaging. On the DRAM side, the company sees growth driven by next-generation HBM, such as HBM4 with 16 layers, which requires more complex and advanced tooling, increasing wafer fab equipment content and growth. Lam Research expects to gain share in WFE, driven by technology transitions and new products.

Valuation and Pricing

With a P/E Ratio of 47.33, P/B Ratio of 28.99, and P/S Ratio of 14.18, Lam Research's valuation multiples indicate a premium pricing. The company's EV/EBITDA ratio is 39.0, suggesting a relatively high valuation. However, with a ROIC of 38.61% and ROE of 62.59%, the company's profitability metrics are strong, justifying some premium. The Dividend Yield is 0.42%, and Free Cash Flow Yield is 2.28%, indicating a relatively low return for income investors.

Guidance and Future Prospects

For 2026, Lam expects WFE to be in the $135 billion range, with growth driven by AI-driven markets, particularly in DRAM and leading-edge foundry logic. The company expects its overall advanced packaging business to grow more than 40% in 2026. Lam's product sales and support teams are executing to the accelerated pace of customer demand, with nearly 40 supplier awards in 2025. Analysts estimate next year's revenue growth at 24.0%, indicating a strong outlook for the company.

Supply Chain and Manufacturing

Lam Research's global manufacturing footprint provides flexibility to adjust production according to customer needs. The company does not foresee significant supply chain bottlenecks, having built a stronger and broader supply chain since the COVID-19 pandemic. Executives discussed their strategy for managing parts availability and scaling production to meet growing demand, expecting to build inventory in total dollar terms as the business grows.

Market Trends and Opportunities

The company expects growth in every quarter of 2026, with a second-half weighted year due to customer capacity additions. China's wafer fab equipment market is expected to be flat year-over-year, while Lam's revenue from China is anticipated to decline as a percentage of total revenue. Lam Research sees opportunities for growth from an etch and depth intensity perspective, with their tools well-positioned to benefit from advancing technology nodes.

3. NewsRoom

Lam Research and CEA-Leti Expand Research and Development Collaboration to Advance Fabrication of Specialty Technologies

Feb -02

Source: prnewswire.com

Retirees Should Know One Third of FlexShares Dividend Fund Is Actually Technology Stocks

Feb -02

Source: 247wallst.com

State of Wyoming Boosts Stock Position in Lam Research Corporation $LRCX

Feb -02

Source: defenseworld.net

Mediolanum International Funds Ltd Grows Stock Position in Lam Research Corporation $LRCX

Feb -01

Source: defenseworld.net

Fortem Financial Group LLC Boosts Holdings in Lam Research Corporation $LRCX

Feb -01

Source: defenseworld.net

Lam Research Q2 Earnings Call Highlights

Jan -30

Source: defenseworld.net

Big Tech Earnings Live: Microsoft Stock Plunges as Cloud Growth Slows; Meta Surges on Strong Results; Apple Results on Deck

Jan -29

Source: investopedia.com

Lam Research Hits New Highs, Boosted by Strong AI Demand and Revenue Growth

Jan -29

Source: gurufocus.com

4. Business Breakdown

4.a. Revenues by Country

4.b. Revenues by Segment

5. Expected revenues mid-term growth (11.00%)

6. Segments

Manufacturing and Servicing of Wafer Processing Semiconductor Manufacturing Equipment

Expected Growth: 11.0%

Lam Research's wafer processing semiconductor manufacturing equipment growth (11.0%) is driven by increasing demand for advanced semiconductors, rising complexity of chip designs, and expansion of manufacturing capacity by semiconductor producers. The company's strong portfolio of innovative equipment solutions and growing market share also contribute to its growth.

7. Detailed Products

ETCH PRODUCTS

Lam Research's etch products are designed to remove material from a substrate, typically silicon, during the fabrication process. These tools use various etch techniques, including plasma-based etching, to create precise patterns on the substrate.

DEPOSITION PRODUCTS

Lam Research's deposition products are designed to deposit thin films of material onto a substrate, typically silicon, during the fabrication process. These tools use various deposition techniques, including chemical vapor deposition (CVD) and atomic layer deposition (ALD).

CLEANING PRODUCTS

Lam Research's cleaning products are designed to remove contaminants and impurities from substrates, typically silicon, during the fabrication process. These tools use various cleaning techniques, including wet cleaning and dry cleaning.

STRIP AND CURE PRODUCTS

Lam Research's strip and cure products are designed to remove photoresist and other organic materials from substrates, typically silicon, during the fabrication process. These tools use various strip and cure techniques, including plasma-based strip and cure.

8. Lam Research Corporation's Porter Forces

Forces Ranking

Threat Of Substitutes

The semiconductor industry is highly specialized, and Lam Research Corporation's products are crucial for the manufacturing of semiconductors. The threat of substitutes is low as customers rely heavily on Lam's equipment for their manufacturing processes.

Bargaining Power Of Customers

Lam Research Corporation's customers are primarily large semiconductor manufacturers. While they have some bargaining power due to their significant purchasing volumes, Lam's dominant position in the market and the critical nature of its equipment limit the customers' ability to negotiate aggressively.

Bargaining Power Of Suppliers

Lam Research Corporation has a diverse supplier base and is not heavily reliant on any single supplier. This reduces the bargaining power of suppliers, allowing Lam to maintain stable and favorable supply terms.

Threat Of New Entrants

The barriers to entry in the semiconductor equipment industry are high due to significant research and development costs, complex technology, and established relationships with customers. This makes it difficult for new entrants to compete effectively, reducing the threat to Lam Research Corporation.

Intensity Of Rivalry

The semiconductor equipment industry is highly competitive, with a few major players competing for market share. The competition is intense, with companies constantly innovating and improving their products to gain an edge over their rivals.

9. SWOT Analysis

10. Capital Structure

10.a. Balance Sheet

10.b. Weighted Average Cost of capital

	Value
Debt Weight	36.85%
Debt Cost	4.33%
Equity Weight	63.15%
Equity Cost	12.14%
WACC	9.26%
Leverage	58.36%

11. Quality Control: Lam Research Corporation passed 8 out of 9 key points

Strong Liquidity

Low Debt

Strong Interest Coverage

Healthy Cash Flow

Operating Efficiency

Strong Return On Equity

Consistent Revenue Growth

Consistent Operating Cash Flow Growth

Margin Improvement

12.a Historical Valuation

12.b Price/Earnings Ratio

12.c Margin Valuation

12.d Peers Valuation

Peers Group Analysis

KLA

A-Score: 5.6/10

Value: 0.8

Growth: 8.3

Quality: 7.9

Yield: 2.0

Momentum: 9.5

Volatility: 5.0

1-Year Total Return ->

Broadcom

A-Score: 5.5/10

Value: 0.0

Growth: 8.3

Quality: 8.2

Yield: 3.0

Momentum: 10.0

Volatility: 3.7

1-Year Total Return ->

Lam Research

A-Score: 5.5/10

Value: 0.8

Growth: 8.1

Quality: 8.3

Yield: 2.0

Momentum: 9.5

Volatility: 4.3

1-Year Total Return ->

Applied Materials

A-Score: 5.3/10

Value: 1.6

Growth: 7.9

Quality: 8.1

Yield: 1.0

Momentum: 8.5

Volatility: 5.0

1-Year Total Return ->

Texas Instruments

A-Score: 4.5/10

Value: 1.0

Growth: 3.6

Quality: 7.1

Yield: 6.0

Momentum: 3.0

Volatility: 6.3

1-Year Total Return ->

Microchip Technology

A-Score: 3.3/10

Value: 2.7

Growth: 1.9

Quality: 3.7

Yield: 5.0

Momentum: 2.5

Volatility: 4.0

1-Year Total Return ->

Peers Metrics

12.e Scoring ^Insights

12.f DCF ^BETA

Parameters

Short Term Growth

18.87%

Short term Time

10.0

Long-Term Growth

2.00%

WACC

9.26%

Lam Research Corporation - US5128071082

1. Company Snapshot

1.a. Company Description

1.b. Last Insights on LRCX

1.c. Company Highlights

Better Quality

Higher Growth

Expensive

Earnings Beats

Revenues Beats

Strong Momentum

Higher Yield

2. Lam Research Corporation's Record Revenues and Growth Outlook

Segment Performance and Outlook

Valuation and Pricing

Guidance and Future Prospects

Supply Chain and Manufacturing

Market Trends and Opportunities

3. NewsRoom

4. Business Breakdown

4.a. Revenues by Country

4.b. Revenues by Segment

5. Expected revenues mid-term growth (11.00%)

6. Segments

Manufacturing and Servicing of Wafer Processing Semiconductor Manufacturing Equipment

Expected Growth: 11.0%

7. Detailed Products

ETCH PRODUCTS

DEPOSITION PRODUCTS

CLEANING PRODUCTS

STRIP AND CURE PRODUCTS

8. Lam Research Corporation's Porter Forces

Forces Ranking

Threat Of Substitutes

Bargaining Power Of Customers

Bargaining Power Of Suppliers

Threat Of New Entrants

Intensity Of Rivalry

9. SWOT Analysis

Strength

Weaknesses

Opportunities

Threats

10. Capital Structure

10.a. Balance Sheet

10.b. Weighted Average Cost of capital

11. Quality Control: Lam Research Corporation passed 8 out of 9 key points

12.a Historical Valuation

12.b Price/Earnings Ratio

12.c Margin Valuation

12.d Peers Valuation

Peers Group Analysis

Peers Metrics

12.e Scoring Insights

12.f DCF BETA

Parameters

Short Term Growth

Short term Time

Long-Term Growth

WACC

Target Price

237.5$

Current Price

237.5$

Potential

-0.00%

Expected Cash-Flows

12.e Scoring ^Insights

12.f DCF ^BETA