Lam Research (LRCX) Stock Forecast & Price Target

Lam Research demonstrates a strong positive outlook based on its substantial market share in the semiconductor wafer fabrication equipment sector, where it has increased its global WFE share from approximately 10% a decade ago to around 15% recently. Financial projections indicate that the company's service segment is expected to grow significantly, potentially reaching 1.5 times its CY24 levels, with further acceleration anticipated if the semiconductor industry achieves $1 trillion in revenues by CY28. Additionally, Lam's gross margins remain impressive at 50.6%, reflecting resilient performance despite tariff challenges, further bolstering confidence in its financial strength and growth trajectory.

The outlook for Lam Research's stock is negatively impacted by a downward revision of revenue guidance, particularly due to new U.S. government export restrictions that are expected to significantly reduce sales by $600 million in calendar year 2026. Additionally, the company's gross margins are anticipated to decline to 48.5% as a result of a less favorable customer mix, with revenues from China projected to drop from 43% to below 30% of total sales by CY26. Near-term expectations are further tempered by tariff-related headwinds, which will create modest challenges for gross margins amidst a cooling demand from domestic Chinese customers.