What Has The Market Missed In Lam Research Stock’s Drop?
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Lam Research (LRCX) stock lost 33.7% between October 6 and November 4, 2026, while the S&P 500 fell 1.6%. Yet one customer group points the other way, with memory chipmakers spending heavily. So how much of Lam’s equipment are memory makers buying right now?
Memory Makers Buy Nearly Half Of Lam’s Equipment
Management said on the October 21 call that memory makers accounted for 46% of Lam’s systems revenue, its equipment sales, in the September quarter. While that percentage matched the June quarter, memory sales in dollars reached a record and climbed 120% from a year earlier.
Those memory purchases expanded more than twice as fast as the company overall. During that quarter, fiscal Q1 2027, Lam’s total revenue reached $8.22 billion, up 54.4% from a year earlier.
Memory producers are also adopting newer Lam products. Management said the company’s Aether tools are already ramping in high-volume manufacturing of HBM chips, with more openings ahead at DRAM and foundry logic customers. Management now expects cumulative Aether revenue of about $2.5 billion by the end of the decade, roughly $1 billion above its earlier expectation.
Will Memory Makers Keep Buying From Lam In 2027?
Management’s forecast for chipmaking equipment spending points in that direction. This outlook matters because Lam’s customers have cut back before. In the twelve months ended September 24, 2023, Lam’s sales fell 12.0% from the twelve months before.
In its preliminary outlook, management expects the industry’s spending on chipmaking equipment to top $200 billion in calendar 2027. Management expects DRAM spending to grow fastest in percentage terms, followed by foundry logic and NAND. Management also said the use of etch and deposition is rising in the short term, and would increase even faster if chipmakers leap straight to 3D DRAM.
That is a forecast, not a result. Management also expects limits on clean room space and on some components to keep chipmakers and equipment makers from fully meeting demand in 2027.
Where Lam’s Outlook Looks Less Certain
The sales mix within the memory segment shifted. DRAM’s share of Lam’s systems revenue slipped to 20% in the September quarter from 23% in the June quarter, even though DRAM sales in dollars reached a record.
Lam also faces constraints across its whole business in the December quarter. Management guided revenue to $8.6 billion plus or minus $400 million, noting the projection would have been a bit higher without near-term supply chain constraints. Management also expects China to account for a meaningfully lower share of revenue in the December quarter, because of lower sales to domestic customers in China.
Even after the drop, Lam is not a cheap stock to hold if memory makers pull back. It trades at 32.8 times its earnings over the last twelve months, compared with 22.8 for the S&P 500.
Memory makers are buying heavily from Lam today, while their 2027 spending remains management’s forecast. Lam’s memory sales in its next report, expected in January 2027, are the figure to watch.
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