We use cookies to understand how you use our site and to improve your experience.
This includes personalizing content and advertising.
By pressing "Accept All" or closing out of this banner, you consent to the use of all cookies and similar technologies and the sharing of information they collect with third parties.
You can reject marketing cookies by pressing "Deny Optional," but we still use essential, performance, and functional cookies.
In addition, whether you "Accept All," Deny Optional," click the X or otherwise continue to use the site, you accept our Privacy Policy and Terms of Service, revised from time to time.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
Should You Still Hold LRCX Stock Despite a 91% Rally in Six Months?
Read MoreHide Full Article
Key Takeaways
LRCX stock jumped 90.7% in six months, outperforming peers and the broader semiconductor industry.
Lam Research is benefiting from AI-driven demand, with strong growth in advanced packaging and chip tools.
LRCX posted 22% revenue growth and rising margins, but trades at a premium valuation vs. industry average.
Lam Research Corporation (LRCX - Free Report) has delivered a robust 90.7% gain over the past six months, placing itself among the best-performing technology stocks in the broader equity market amid ongoing macroeconomic challenges and geopolitical tensions. This performance easily beat the broader Zacks Electronics - Semiconductors industry, which increased 18.6% in the same period.
The stock has also outpaced the gains of other major semiconductor equipment providers, including Applied Materials (AMAT - Free Report) , KLA Corporation (KLAC - Free Report) and ASML Holding (ASML - Free Report) . Over the trailing six months, shares of Applied Materials, KLA Corporation and ASML Holding have surged 83.1%, 69.4% and 50.4%, respectively.
This outperformance shows investors are becoming increasingly confident in Lam Research’s long-term story, even in a volatile market shaped by trade conflicts and geopolitical risks. We believe this momentum is grounded in strong fundamentals, and LRCX’s long-term outlook justifies a hold position for now.
Lam Research 6-Month Price Return Performance
Image Source: Zacks Investment Research
AI Boom Boosts LRCX’s Prospects
Lam Research is capitalizing on artificial intelligence (AI) trends. It builds the tools chipmakers need to manufacture next-generation semiconductors, including high-bandwidth memory (HBM) and chips used in advanced packaging. These technologies are vital for powering AI and cloud data centers.
Lam Research’s products are not only critical but also innovative. For example, its ALTUS ALD tool uses molybdenum to improve speed and efficiency in chip production. Another product, the Aether platform, helps chipmakers achieve higher performance and density. These are essential capabilities as demand for advanced AI chips continues to increase.
In 2025, Lam Research’s revenues from advanced packaging grew significantly, and management anticipates strong 40% year-over-year growth for 2026. The industry’s migration to backside power distribution and dry-resist processing presents growth opportunities for LRCX’s cutting-edge fabrication solutions.
These trends are aiding Lam Research’s financial performance. The company has demonstrated consistent execution, maintaining quarterly revenues of more than $5 billion for the past three consecutive quarters, reflecting solid demand from leading chipmakers such as Taiwan Semiconductor Manufacturing and Samsung.
Lam Research’s Resilient Financial Performance
Despite ongoing macroeconomic challenges, geopolitical issues, and trade and tariff wars, LRCX’s financials remain impressive. In the company’s last reported financial results for the second quarter of fiscal 2026, total revenues rose 22% year over year to $5.34 billion and beat the Zacks Consensus Estimate by 2.1%, primarily driven by continued demand across the Systems and Customer Support Business Group segments.
Lam Research reported second-quarter non-GAAP earnings of $1.27 per share, which topped the consensus mark by 8.5%. The bottom line also increased 39.6% on a year-over-year basis.
Lam Research Corporation Price, Consensus and EPS Surprise
Expanding its manufacturing operations in Asia has helped the company lower costs and improve margins. In the second quarter, Lam Research’s non-GAAP operating margin rose to 34.3%, up 360 basis points from the year-ago quarter, which is impressive, considering the challenging macroeconomic environment.
This strong financial performance reinforces Lam Research’s resilience in navigating an evolving semiconductor cycle. As demand grows for advanced nodes, LRCX’s specialized technology in etch and deposition tools for high-aspect-ratio structures positions it well to capitalize on this trend. The company’s second-quarter results also highlight its effective cost management, which has enabled sustained profitability.
With AI-driven investments accelerating, Lam Research’s leading position in etch and deposition makes it a key beneficiary of the ongoing semiconductor spending cycle. The Zacks Consensus Estimate for fiscal 2026 and 2027 revenues implies a year-over-year increase of 21.8% and 23.9%, respectively. The consensus mark for fiscal 2026 and 2027 earnings per share indicates growth of 27.5% and 29.1%, respectively.
LRCX’s Premium Valuation Warrants a Cautious Approach
Lam Research stock isn’t cheap, as reflected by its Zacks Value Score of F. Looking at the current valuation multiple, it trades at a forward 12-month price-to-earnings (P/E) of 40.61X compared with the industry average of 29.96X.
Lam Research Forward 12-Month P/E Ratio
Image Source: Zacks Investment Research
Compared with major semiconductor equipment providers, LRCX trades at a lower P/E multiple than ASML, KLAC and AMAT. At present, ASML Holding, KLA Corporation and Applied Materials have forward 12-month P/E multiples of 39.56, 38.56 and 32.17, respectively.
Final Thoughts: Hold LRCX Stock for Now
Lam Research’s strong technological foundation and strategic focus on high-growth markets like AI and HPC make it a compelling long-term investment. The company’s innovation and operational efficiency provide a solid foundation for future growth.
However, its lofty valuation and ongoing macroeconomic uncertainties call for a more cautious stance. Considering these factors, holding LRCX stock appears to be the most prudent strategy for investors.
View the Zacks #1 Rank List
Image: Bigstock
Should You Still Hold LRCX Stock Despite a 91% Rally in Six Months?
Key Takeaways
Lam Research Corporation (LRCX - Free Report) has delivered a robust 90.7% gain over the past six months, placing itself among the best-performing technology stocks in the broader equity market amid ongoing macroeconomic challenges and geopolitical tensions. This performance easily beat the broader Zacks Electronics - Semiconductors industry, which increased 18.6% in the same period.
The stock has also outpaced the gains of other major semiconductor equipment providers, including Applied Materials (AMAT - Free Report) , KLA Corporation (KLAC - Free Report) and ASML Holding (ASML - Free Report) . Over the trailing six months, shares of Applied Materials, KLA Corporation and ASML Holding have surged 83.1%, 69.4% and 50.4%, respectively.
This outperformance shows investors are becoming increasingly confident in Lam Research’s long-term story, even in a volatile market shaped by trade conflicts and geopolitical risks. We believe this momentum is grounded in strong fundamentals, and LRCX’s long-term outlook justifies a hold position for now.
Lam Research 6-Month Price Return Performance
Image Source: Zacks Investment Research
AI Boom Boosts LRCX’s Prospects
Lam Research is capitalizing on artificial intelligence (AI) trends. It builds the tools chipmakers need to manufacture next-generation semiconductors, including high-bandwidth memory (HBM) and chips used in advanced packaging. These technologies are vital for powering AI and cloud data centers.
Lam Research’s products are not only critical but also innovative. For example, its ALTUS ALD tool uses molybdenum to improve speed and efficiency in chip production. Another product, the Aether platform, helps chipmakers achieve higher performance and density. These are essential capabilities as demand for advanced AI chips continues to increase.
In 2025, Lam Research’s revenues from advanced packaging grew significantly, and management anticipates strong 40% year-over-year growth for 2026. The industry’s migration to backside power distribution and dry-resist processing presents growth opportunities for LRCX’s cutting-edge fabrication solutions.
These trends are aiding Lam Research’s financial performance. The company has demonstrated consistent execution, maintaining quarterly revenues of more than $5 billion for the past three consecutive quarters, reflecting solid demand from leading chipmakers such as Taiwan Semiconductor Manufacturing and Samsung.
Lam Research’s Resilient Financial Performance
Despite ongoing macroeconomic challenges, geopolitical issues, and trade and tariff wars, LRCX’s financials remain impressive. In the company’s last reported financial results for the second quarter of fiscal 2026, total revenues rose 22% year over year to $5.34 billion and beat the Zacks Consensus Estimate by 2.1%, primarily driven by continued demand across the Systems and Customer Support Business Group segments.
Lam Research reported second-quarter non-GAAP earnings of $1.27 per share, which topped the consensus mark by 8.5%. The bottom line also increased 39.6% on a year-over-year basis.
Lam Research Corporation Price, Consensus and EPS Surprise
Lam Research Corporation price-consensus-eps-surprise-chart | Lam Research Corporation Quote
Expanding its manufacturing operations in Asia has helped the company lower costs and improve margins. In the second quarter, Lam Research’s non-GAAP operating margin rose to 34.3%, up 360 basis points from the year-ago quarter, which is impressive, considering the challenging macroeconomic environment.
This strong financial performance reinforces Lam Research’s resilience in navigating an evolving semiconductor cycle. As demand grows for advanced nodes, LRCX’s specialized technology in etch and deposition tools for high-aspect-ratio structures positions it well to capitalize on this trend. The company’s second-quarter results also highlight its effective cost management, which has enabled sustained profitability.
With AI-driven investments accelerating, Lam Research’s leading position in etch and deposition makes it a key beneficiary of the ongoing semiconductor spending cycle. The Zacks Consensus Estimate for fiscal 2026 and 2027 revenues implies a year-over-year increase of 21.8% and 23.9%, respectively. The consensus mark for fiscal 2026 and 2027 earnings per share indicates growth of 27.5% and 29.1%, respectively.
LRCX’s Premium Valuation Warrants a Cautious Approach
Lam Research stock isn’t cheap, as reflected by its Zacks Value Score of F. Looking at the current valuation multiple, it trades at a forward 12-month price-to-earnings (P/E) of 40.61X compared with the industry average of 29.96X.
Lam Research Forward 12-Month P/E Ratio
Image Source: Zacks Investment Research
Compared with major semiconductor equipment providers, LRCX trades at a lower P/E multiple than ASML, KLAC and AMAT. At present, ASML Holding, KLA Corporation and Applied Materials have forward 12-month P/E multiples of 39.56, 38.56 and 32.17, respectively.
Final Thoughts: Hold LRCX Stock for Now
Lam Research’s strong technological foundation and strategic focus on high-growth markets like AI and HPC make it a compelling long-term investment. The company’s innovation and operational efficiency provide a solid foundation for future growth.
However, its lofty valuation and ongoing macroeconomic uncertainties call for a more cautious stance. Considering these factors, holding LRCX stock appears to be the most prudent strategy for investors.
Lam Research carries a Zacks Rank #3 (Hold) at present. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.