Lam Research Corporation (LRCX) is set to report its fiscal fourth-quarter 2026 earnings on Wednesday, July 29, and the chip equipment maker is heading into it with solid momentum.
The Fremont, California-based company, now valued at $364.7 billion, has seen its stock rise 165.5% over the past 52 weeks, well ahead of the S&P 500 Index's ($SPX) 15.7% gain and the Technology Select Sector SPDR ETF's (XLK) 27.6% move in the same period.
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Analysts are looking for diluted EPS of $1.69 for the quarter, up 27.07% from the $1.33 per share Lam posted a year ago. LRCX has also beaten Wall Street's EPS estimates in each of its last four quarterly reports.
That matters because its previous quarter, the fiscal third quarter ended March 29, saw revenue jump 24% year-over-year (YOY) to $5.84 billion, while non-GAAP EPS hit a record $1.47 and topped consensus by 8.1%.
So the big question is simple. Can Lam Research keep this rally going, or is this the point where the market starts demanding even more?
Breaking Down Recent Performance
Lam makes the tools chipmakers use to build advanced semiconductors, especially for etch and deposition. Because of that, its business tends to move with chip demand and broader spending by semiconductor makers.
The stock has had a strong run, up 53% so far this year.
www.barchart.comBut that rally has also pushed the valuation higher, with Lam Research Corporation trading at a forward price-to-earnings ratio of 40.41 times, above the sector average of 24.03 times. It also pays a 0.33% dividend yield, below the tech average of 1.37%, with a quarterly dividend of $0.260, a forward payout ratio of 18.82%, and 11 straight years of dividend hikes.
The latest March 2026 quarter was solid. Revenue rose to $5.84 billion from $5.35 billion in the prior quarter, while gross margin edged up to 49.8% and operating margin improved to 35.0%. Net income climbed to $1.83 billion, or $1.45 per share, from $1.26 per share before.
Cash and restricted cash fell to $4.77 billion from $6.20 billion, mostly because of capital returns, debt payments, and capex. Looking ahead, Lam Research Corporation guided for about $6.6 billion in revenue and EPS of around $1.65 for the June quarter, while analysts expect $1.69 in EPS for the current quarter and $5.68 for full-year 2026.
Core Drivers Behind the Story
Lam’s new five-year deal with International Business Machines (IBM) is all about pushing chip scaling past the 1nm mark, with work centered on new materials, fabrication steps, and High NA EUV lithography. It builds on more than 10 years of work between the two companies, including progress on 7nm and nanosheet technologies, and now moves toward more advanced chip designs and better interconnects as the industry keeps pushing past older limits.
At the same time, Lam is growing its reach in specialty technologies through a multi-year partnership with French research institute CEA-Leti. That work covers MEMS, 3D imaging, RF solutions, photonics, MicroLED displays, and optical interconnects. The goal is to create new materials and better ways to make compound semiconductors, with a clear focus on AI and high-performance computing. It is also meant to help solve the engineering problems that come with more complex devices.
Adding to that, Lam has also been tied to Elon Musk’s Terafab project, a planned 2-nanometer chip facility expected to start production by 2029. The project, which involves Tesla, SpaceX, and xAI, has reportedly reached out to Lam Research and Applied Materials (AMAT) as possible equipment suppliers for what is being called the world’s largest semiconductor fab.
Analyst Expectations and Price Targets
Morgan Stanley is a bit more upbeat on Lam Research ahead of its July 29 earnings report, raising the stock to “Overweight” from “Equal Weight” and lifting its price target to $331 from $293. That new target points to 24.5% upside from the stock's current positioning.
Analyst Shane Brett and his team also bumped up their 2026 wafer-fabrication-equipment forecast to $149 billion, saying the spending cycle may last longer than they first thought. Their view is based on stronger spending on leading-edge logic and bit demand running above 40% in both DRAM and NAND, which should help memory equipment sales recover more broadly.
Morgan Stanley also thinks Lam Research can keep doing better than the overall market after a rough 2023. That year, Lam’s shipments trailed the wider WFE market by 33 percentage points, hurt by the NAND slump and China export rules.
But the company then beat the market by 8 percentage points in 2024, and Morgan Stanley sees another 27-point outperformance in 2025. It also expects that strength to carry through 2027, helped by 59% growth in NAND systems, which would top the sector’s previous 2021 high.
Wall Street is broadly positive too. All 33 analysts surveyed rate Lam Research a consensus “Strong Buy”, and the average price target of $378.51 suggests 42% upside from current levels.
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www.barchart.comConclusion
Lam Research heads into July 29 with the kind of setup that usually keeps investors glued to the print. The stock has already run hard, the fundamentals are still improving, and analysts remain broadly bullish, so the market will likely focus on whether management can back up all that optimism with another strong quarter and steady guidance. My read is that the shares are more likely to stay firm or edge higher if the report confirms demand strength and healthy margins, while any disappointment on guidance could trigger a quick pullback because expectations are already high.
On the date of publication, Ebube Jones did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. For more information please view the Barchart Disclosure Policy here.
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