The Case For Lam Research Stock Rests On One Thing

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Investors pay 35.7 times trailing earnings for Lam Research (LRCX), compared with 22.6 for the S&P 500. That price appears to assume the chip equipment maker’s fast growth keeps going. The risk is that Lam cannot ship all the tools chip makers want. Chip makers are short of clean room space, some components are in short supply, and management expects those limits to last into calendar year 2027. Lam has yet to show how much of its sales those shortages are already holding back.

Management Says Shortages Held Back Lam Research’s Sales Forecast

Management has said Lam’s revenue forecast for the December 2026 quarter would have been a bit higher if not for near-term supply chain constraints. During the company’s fiscal first-quarter 2027 call on October 21, 2026, analysts asked what Lam is doing to ease those constraints and how much equipment spending they hold down.

Lam expects December-quarter revenue of $8.6 billion, plus or minus $400 million. That follows $8.22 billion in the September quarter, up 54.4% from a year earlier. Lam still expects its sales to rise, just by a bit less than they could have. Management also expects China to be a much smaller share of December revenue. It said the drop comes from Lam’s domestic customers in China, while multinationals operating in China should stay reasonably strong.

Will Lam Research Recover Sales Held Back By Shortages?

Management did not promise to win back the whole December shortfall. It said equipment that slips out of December because of timing will ship in the March quarter instead, though executives would not say how much revenue that is. Many of Lam’s suppliers are well capitalized and can fund their own expansion, management added. It said Lam is working with those suppliers to speed up their expansion, and would be open to investing if it had to.

Lam has given less of an answer for calendar year 2027. Management expects the industry to spend more than $200 billion on chipmaking equipment that year, and says demand without the limits would be higher. Executives would not put a number on that either, but said the company would give more detail on its next quarterly call.

Lam Research’s Next Sales Forecast Comes In January

Lam’s next report is expected in January 2027. The figure to watch in that release will be the company’s revenue forecast for the March 2027 quarter, set beside what it actually sold in December.

Does This Mean You Should Act On LRCX?

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