For Immediate Release

Chicago, IL – January 28, 2026 – Zacks Equity Research shares Lam Research (LRCX Quick QuoteLRCX - Free Report) , as the Bull of the Day and Generac Holdings (GNRC Quick QuoteGNRC - Free Report) as the Bear of the Day. In addition, Zacks Equity Research provides analysis on —Micron Technology, Inc.’s (MU Quick QuoteMU - Free Report) and NVIDIA Corp. (NVDA Quick QuoteNVDA - Free Report) .

Here is a synopsis of all three stocks:

Bull of the Day:

Lam Research became a Zacks #1 Rank again ahead of its earnings report Wednesday afternoon.

As with many semiconductor companies, from chip designers like NVIDIA and Advanced Micro Devices to the foundries like Taiwan Semi and Intel, the bull case for wafer fabrication equipment (WFE) companies like Lam Research has shifted from a cyclical recovery to a structural "content gain" play.

And it didn't hurt that two weeks ago TSMC revealed expanded capex plans for their "fabs" in Arizona and Taiwan and Micron broke ground on a $100 billion leading-edge memory manufacturing complex in Onondaga County, New York, which will include up to four fabs capable of producing advanced memory to support the rising demand for artificial intelligence systems and devices.

Since then, there have been a flurry of investment bank analyst actions, including raising EPS estimates and price targets...

It looks like most of these analysts were stuck in their Sep quarter narratives -- before the Micron and Sandisk DRAM and NAND flash memory/storage explosion -- with average targets below $200!

BofA to $245

Stifel to $250

Wells to $250

Needham to $250

UBS to $255

Deutsche to $260

RBC initiates with $260

Citi to $265

The 2026 "Etch Intensity" Supercycle

While the lithography laser light show of ASML often grabs the WFE headlines, the transition to Gate-All-Around (GAA) transistors and HBM4 (High Bandwidth Memory) is where Lam’s etch and deposition dominance becomes the primary bottleneck solver.

Lam Research’s Systems segment revenues are likely to have registered strong growth in their Q2 of FY'26 (ends June), mainly driven by the strength of its foundry business which continues to benefit from rising investments in advanced chip manufacturing, especially for AI and HPC applications.

The company’s strong position in etch and deposition tools, which are critical for smaller and more complex transistor designs, has made it a key supplier to major foundries.

Lam’s new technologies, such as the Aether dry resist extreme ultraviolet (EUV) patterning solution and the Akara conductor etch system, have been gaining traction with leading-edge chipmakers as well. These advanced technologies improve pattern precision and process efficiency, which is essential for the ongoing transition to next-generation nodes like gate-all-around transistors.

We believe that the company’s sustained focus on expanding technological leadership, along with the rising demand for AI and advanced computing chips, has strengthened its foundry business. This is likely to have boosted Lam Research’s Systems revenues in Q2.

The Zacks model estimates second-quarter Systems’ revenues to be $3.41 billion, indicating a year-over-year increase of 29.7%.

3 Strategic Pillars for LRCX

1. The GAA Inflection (TSMC 2nm/A14): TSMC is aggressively scaling 2nm capacity at Fabs 20 and 22, targeting over 140,000 wafers per month by year-end. GAA architectures are roughly 20% more etch-intensive than FinFET. Lam’s selective etch and ALD (Atomic Layer Deposition) tools are mission-critical for the complex "nanosheet" releases required at these nodes.

2. The HBM4 War (Micron vs Samsung): The memory market is entering a "Supercycle" driven by AI. Samsung and Micron are racing to 16-layer HBM4 stacks. This vertical scaling relies on High-Aspect-Ratio (HAR) etching for Through-Silicon Vias (TSVs) -- a segment where Lam maintains a dominant market share. As stacks get taller, the margin for error shrinks, favoring Lam’s Cryo 3.0 etching technology.

3. Financial Fortress: With global WFE spending tracking toward a record $150 billion, Lam is capturing high-margin growth. Their Customer Support Business Group (CSBG) provides a resilient recurring revenue floor (~30% of total revenue), ensuring stability even as capital expenditure cycles fluctuate.

Bottom Line: Lam is the "digital blacksmith" of the AI era. With 2nm ramping and memory going vertical, Lam’s content-per-wafer is at an all-time high. Trading at a forward P/E of 40x and 11x sales -- vs ASML at 44x and 13x -- it appears analysts are still cautious assigning software growth multiples to the chip sector. That means they still underappreciate the margin expansion coming from the shift to the Angstrom era (sub-2nm) that will impact the entire hardware ecosystem.

By the way, one analyst who didn't miss the ride since the Sep quarter was our own Dave Bartosiak who runs the Zacks Surprise Trader portfolio. He bought LRCX shares on October 14 at $139 and was enjoying a 60%+ gain with shares above $223 this week. I expect that ride to continue higher after Wednesday's Dec quarter report.

Kevin Cook is a Senior Stock Strategist at Zacks where he runs the TAZR Trader portfolio and owns NVDA and TSM shares.

Bear of the Day:

Generac Holdings is a leading manufacturer of power generation equipment, including standby generators, energy storage, and related products, serving residential, commercial, industrial, and portable needs. The company focuses on backup power solutions amid rising demand from outages, data centers, and electrification trends.

Revenue Segments

Generac's 2024 revenue reached $4.3 billion, with Residential products at 56-57% ($2.4 billion), Commercial & Industrial (C&I) at 32% ($1.4 billion), and Other products/services at 11%. Domestic sales dominate at 84%, with international at 16%. TTM revenue through mid-2025 stands at $4.41 billion.

The problem is that fiscal year 2025 revenues are looking like they are going to come in flat near $4.3 billion too.

Growth Rates

Revenue grew 6.8% in 2024 after an 11.9% decline in 2023, with TTM growth at 9.7%. Residential averaged 9.5% YoY growth over two years, while C&I saw 2.2% declines; Q3 2025 sales fell 5% to $1.11 billion. Analysts project 7.7% revenue growth over the next year and flat 2025 sales amid weak outages, with EPS up 15.8% to $7.54. Long-term CAGR is 14% since 2000.

Profits are a problem too with the Zacks consensus for 2025 projected at EPS of $6.61, representing a 9% annual drop.

Q3 Report Displays the Weakness

Generac reported third-quarter 2025 adjusted earnings per share (EPS) of $1.83, which missed the Zacks Consensus Estimate of $2.25 by 18%. GNRC reported adjusted EPS of $2.25 in the prior-year quarter.

Net sales were $1.11 billion, down 5% compared with $1.17 billion reported in the prior-year quarter. The figure also missed the consensus estimate of $1.2 billion.

Weaker seasonal demand for home standby and portable generators offset increases in sales for global C&I products and higher shipments of residential energy technology products. Although home standby and portable generator shipments were up sequentially in the quarter, they came in below expectations due to a power outage environment that was considerably below the baseline average, as highlighted by GNRC.

As a result of a weak power outage environment, management has revised its expectations for 2025. For 2025, GNRC now expects revenues to be flat compared with an increase of 2-5% guided earlier.

Net income margin (before deducting for non-controlling interests) is now expected to be 6% compared with 7.5-8.5% guided earlier. Adjusted EBITDA margin is now estimated to be 17% compared with the previous range of 18% to 19%. GNRC now expects free cash flow conversion from adjusted net income to be 80% compared with the previous guided range of 90% to 100%.

Demand and Backlog

Management describes data center power as a “generational opportunity,” with the potential to double C&I sales over the next three to five years as hyperscale and AI-driven capacity build out.

The order backlog for large megawatt generators has roughly doubled in recent quarters, explicitly tied to data center projects, and is now a key component of forward C&I visibility.

Customers, Partners, and Competition

Key customers include residential homeowners, C&I clients like data centers (e.g., C7 Data Centers), and industrial users. Generac supplies high-capacity generators (2.25-3.25 MW) for data centers and partners with Wallbox for EV charging integration.

This month, Generac acquired a Sussex, WI manufacturing site to expand C&I production alongside their Beaver Dam and Oshkosh facilities. This long-term focus on growth is a key factor for investors to focus on during the short-term slump.

But there is new competition on the block.

Bloom Energy leads in solid oxide fuel cells (SOFCs) for stationary on-site power, targeting data centers with efficient, grid-independent generation deployable in 90 days. Bloom has customers like Oracle and partners with Brookfield Corp. to supply datacenters with fast, clean, agile energy.

Bloom also recently inked a $2.65 billion deal with American Electric Power to provide fuel cells. I originally bought Bloom Energy shares in September because they had a chance to double revenues in under two years just like Generac did from 2020-2022 to $4.5 billion. Bloom Energy is projected to grow the topline by 38% this year to cross $2.6 billion.

While Generac dominates combustion generators, Bloom's cleaner fuel cells pose indirect competition in resilient backup markets like data centers as both serve electrification but differ technologically. Generac's Q3 strength in C&I data center shipments highlights this shared space.

Kevin Cook is a Senior Stock Strategist for Zacks where he runs the TAZR Trader portfolio and holds shares of Bloom Energy.

Additional content:

Micron at 11.7 P/E: One of 2026’s Best Buying Opportunities

Micron Technology, Inc.’s  shares tripled in 2025, far outpacing Wall Street favorite NVIDIA Corp. But for investors who haven’t yet jumped in, there is still a chance to invest in the company’s growth story, especially given its attractive valuation. Let’s see in detail –

Micron Gains From Surging HBM Demand

Surging demand for Micron’s high-bandwidth memory (HBM) chips has lately powered its quarterly performance. Micron’s HBM chips are increasingly valued as they are capable of handling large volumes of workloads while improving power efficiency.

Micron’s first-quarter fiscal 2026 revenues soared 56% year over year to $13.64 billion, and surpassed Wall Street’s projection of $12.88 billion, according to investors.micron.com. In particular, its cloud memory business unit reported sales of $5.28 billion, up a whopping 99.5% from the same period a year ago. Strong revenues helped Micron post a non-GAAP net income of $5.48 billion, surpassing analysts’ estimates.

The demand for Micron’s HBM chips is poised to increase further and shows no signs of easing as supply remains constrained. The expansion of AI infrastructure by hyperscalers and data center operators has increased the demand for HBM chips. Micron’s CEO, Sanjay Mehrotra, added that HBM supply constraints are expected to persist amid strong demand, creating a supply-demand imbalance that could lead to higher prices, benefiting Micron in the near future.

The total addressable marketfor HBM is expected to expand at a CAGR of around 40% from $35 billion in 2025 to nearly $100 billion by 2028, according to Micron. Against this backdrop, the company expects its financial performance to strengthen, with second-quarter fiscal 2026 revenues projected in the range of $18.3 billion to $19.1 billion, and net income also expected to increase.

Micron Offers Strong Growth at Attractive Valuation

Incessant demand for Micron’s HBM chips amid AI infrastructure growth has positioned it for further gains. The supply constraint and rapidly expanding market will surely boost Micron’s profit margins.

Interestingly, the market appears to be underestimating Micron’s growth potential. With a forward price-to-earnings (P/E) ratio of 11.76, well below the Computer-Integrated Systemsindustry’s average of 19.33, Micron presents an alluring buying opportunity without overpaying. The company’s high growth potential with healthy operating margins enhances its appeal to investors (read more: Micron vs. Palantir: Which AI Stock Is the Better Buy for 2026?).

Micron currently sports a Zacks Rank #1 (Strong Buy), and its $33.01 Zacks Consensus Estimate for earnings per share implies growth of 200.9% year over year. You can see the complete list of today’s Zacks #1 Rank stocks here.

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