Lam Research (LRCX) Stock Forecast & Price Target

Lam Research is poised for significant revenue growth, projecting over $3 billion in combined revenues from Gate-All-Around (GAA) and Advanced Packaging (AP) by CY25, highlighting the company's strong positioning in key segments of the semiconductor market. The company’s CSBG revenue, which has seen a remarkable 180% increase since CY13, is expected to continue its upward trajectory with a projected 50% growth by CY28, contributing positively to operating margins and overall earnings per share (EPS). Additionally, Lam’s advancements in gross margin from its facilities, particularly in Asia, hint at a sustainable improvement in profitability that complements the anticipated expansion of market share in wafer fabrication equipment from 9.6% in 2024 to approximately 12.5% by 2028.

Lam Research faces a negative outlook primarily due to significant underperformance against revenue targets, exacerbated by a dramatic decline in NAND spending, which is projected to fall to approximately $7-8 billion for CY23 and CY24, compared to a peak of $18 billion in CY22. The company's share of wafer fabrication equipment (WFE) was recorded at 16.2%, significantly below the previously guided range of 23.5% to 25.0%, contributing to revenues of $16.2 billion that were slightly beneath the lower end of the target model of $16.5 billion to $17.5 billion. Furthermore, Lam's earnings per share (EPS) of $3.36 fell short of the lowest target model estimate of $3.50, partly due to a substantial increase in R&D spending, reflecting challenges in achieving growth while investing in future initiatives.