Lam Research (LRCX) is the world's leading semiconductor equipment company that supplies etching and deposition equipment essential for the production of AI memory HBM and 3D NAND. It is a high-valuation stock that has entered the 12-month baseline target price and Hold investment rating zone, driven by an upward revision of the 2026 WFE market outlook and record-high quarterly revenue.
Analysis Date: 2026-06-29 · Applicable Exchange Rate: 1 USD = 1,543 KRW (All KRW conversions in this text were calculated using this exchange rate) · Current Price: 1 TP4T379.09 (approx. 584,936 KRW) · This article is an analysis for informational purposes only and is not an investment recommendation.
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- Key Summary of Lam Research LRCX Stock Outlook
- What kind of company is Lam Research (LRCX)?
- Key Terms You Need to Know Before Analyzing Lam Research
- Lam Research Recent Q4 Earnings Analysis
- Lam Research Fair Value Analysis (DCF/Multiple)
- Lam Research vs. Competitor Comparison
- Lam Research Growth Outlook and Key Drivers
- Lam Research 12-Month Target Price Scenario
- Lam Research Recent Major Issues
- Key Risks When Investing in Lam Research
- Lam Research Investment Opinion Conclusion
- 5 Frequently Asked Questions about Lam Research
Key Summary of Lam Research LRCX Stock Outlook
Lam Research's 12-month baseline target price is $405 (approx. 624,915 won).
The investment recommendation is Hold.
The key reason is that although the WFE market in 2026 has been revised upward to $140B due to AI and HBM demand, the valuation burden is significant at a forward P/E of 47x.
Lam Research is a semiconductor equipment company that ranks first in the world for etching and deposition process equipment.
Revenue for the third quarter of fiscal year 2026 (ended March 2026) was 1.84 billion (approx. 9.0134 trillion won), marking a record high for a quarter and an increase of 241 billion compared to the previous year.
- strengthWith the production of HBM and 3D NAND for AI GPUs driving demand for etching and deposition equipment, the 2026 WFE market outlook has been raised to $140B.
- strengthProfit stability has increased with the Customer Support (CSBG) division, which achieved record-high quarterly revenue and operating profit, and surpassed 1 TP 4 T 2 B in revenue for the first time.
- RiskThe current price of $379.09 (approx. 584,936 won) exceeds the analyst average target price ($340.58) and is significantly above the historical average with forward P/E of 47x and P/B of 45x.
What kind of company is Lam Research (LRCX)?
Lam Research is a semiconductor equipment company founded in 1980 and headquartered in Fremont, California, USA. It has approximately 20,600 employees.
Its main focus is on etch and deposition equipment, and it also operates a Customer Support Business Group (CSBG) that supports cleaning and installation equipment.
Representative products include etching equipment such as Vantex, Kiyo, and Flex; deposition equipment such as ALTUS, VECTOR, and Striker; and cleaning equipment such as Coronus and EOS.
The business model is divided into equipment sales (systems) and post-installation parts, upgrades, and services (customer support). Customer support revenue is a stable source of income that is less sensitive to economic fluctuations.
Major competitors are Applied Materials (AMAT), KLA (KLAC), Tokyo Electron (TEL), and ASML, and Lam Research is particularly strong in the etching and deposition fields, which have high exposure to memory (DRAM and NAND).
Key Terms You Need to Know Before Analyzing Lam Research
- WFE (Wafer Fabrication Equipment): Wafer processing equipment. It refers to the entire market for etching, deposition, cleaning, and inspection equipment purchased by semiconductor fabs for chip production, and is a leading indicator of Lam Research's revenue.
- EtchIt is a process that creates fine circuit patterns by etching thin films on the wafer surface using plasma and chemicals. Lam Research holds the number one global market share.
- Deposition (ALD/CVD): It is a process of depositing a thin film onto a wafer. Atomic Layer Deposition (ALD) is essential for 3D NAND and Gate-All-Around (GAA) transistors and is a core business of Lam Research.
- HBM (High Bandwidth Memory)High bandwidth memory. As a DRAM stacked on AI GPUs, Lam Research benefits as the demand for etching and deposition process equipment grows as HBM production increases.
- CSBG (Customer Support Business Group): Customer Support Division. It generates revenue from parts, upgrades, and services for already installed equipment, serving as a stable source of income that is less sensitive to economic fluctuations than equipment sales.
Lam Research Recent Q4 Earnings Analysis
Revenue has shown a steady upward trend over the past four quarters. Revenue for the third quarter of fiscal year 2026 (ended March 2026) was 1.84 billion (approx. 9.0134 trillion won), an increase of 241 billion from the previous year and 91 billion from the previous quarter.
| branch | Sales (USD) | Sales (converted to KRW) | GAAP EPS | Operating profit margin |
|---|---|---|---|---|
| FY26 Q3 (2026-03) | $5,841.5M | Approximately 9 trillion 134 billion won | $1.45 | 35.0% |
| FY26 Q2 (2025-12) | $5,344.8M | Approximately 8 trillion 248 billion won | $1.26 | 33.9% |
| FY26 Q1 (2025-09) | $5,324.2M | Approximately 8 trillion 12 billion won | $1.24 | 34.4% |
| FY25 Q4 (2025-06) | $5,171.4M | Approximately 7.7654 trillion won | $1.35 | 33.7% |
The recently announced Q3 FY26 results (April 22, 2026) exceeded market expectations. Revenue of $5.84 billion surpassed the consensus estimate of $5.73 billion, and non-GAAP earnings per share of $1.47 surpassed the consensus estimate of $1.36.
In this quarter, the Customer Support (CSBG) segment diversified its revenue base, surpassing quarterly revenue of 1 TP/4 T/2.1 B for the first time in history. Detailed quarterly figures are 10-Q report filed with the SECYou can check it at.
Financial soundness is also sound. With a current ratio of 2.54 times, cash on hold of 4.75 billion (approx. 7.3306 trillion won), and total liabilities of 3.73 billion (approx. 5.7623 trillion won), it is close to a net cash position. The last 12 months (TTM) free cash flow is approximately 6.0 billion (approx. 9.2654 trillion won).
TTM revenue is $21,681.8M (approx. 33.455 trillion won), TTM GAAP earnings per share is $5.31 (approx. 8,193 won), and return on equity (ROE) is 66.8%, which is the highest level in the industry.
Lam Research Fair Value Analysis (DCF/Multiple)
In terms of multiples, Lam Research is trading significantly above its historical average. With trailing P/E of 71x, forward P/E of 47x, P/B of 45x, and P/S of 22x, it has undergone a significant re-rating compared to the levels where it typically traded between 15 and 20x in the past.
Intrinsic value was examined using a simplified DCF. The key assumptions are as follows.
| DCF assumption | Usage value | reason |
|---|---|---|
| Discount rate (WACC) | 11% | Reflecting Beta 1.87, industry capital costs |
| End-of-life growth rate (g) | 3.0% | Long-term GDP + Inflation |
| forecast period | 5 years | Semiconductor Equipment Cycle Visibility |
| Standard FCF | Approximately $6,000M | Previous TTM free cash flow |
| Strong FCF | Approx. $7,800M | Standard ×1.3 (WFE Upward Scenario) |
| Weak FCF | Approximately $4,500M | Base × 0.75 (Memory capex slowdown) |
The formula is as follows: Fair Value (per share) = Σ[FCFₜ ÷ (1+WACC)ᵗ] + End-of-life Value ÷ (1+WACC)ᴺ, End-of-life Value = FCF_N × (1+g) ÷ (WACC − g).
The fair value range of the DCF calculated under this assumption is approximately $90 to $165 (approximately 138,870 won to 254,595 won). This is significantly lower than the current price of $379.09 (approximately 584,936 won).
In other words, the current stock price is driven by momentum and multiple expansion that reflect the long-term continuation of the AI supercycle, rather than by intrinsic value based on free cash flow. The valuation assessment is "overvalued relative to intrinsic value." However, as analysts are successively raising target prices based on strong demand, the stock price may receive support in the short term through multiples. The latest consensus target price is Compilation of analyst target pricesYou can check it at.
Lam Research vs. Competitor Comparison
| item | Lam Research (LRCX) | AMAT | KLAC | ASML |
|---|---|---|---|---|
| Market capitalization | $474.08B (approx. 731 trillion won) | $497.69B (approx. 768 trillion won) | $324.79B (approx. 501 trillion won) | Approx. $430B (Overview) |
| TTM Sales | $21,681.8M | $29,024.0M | $13,096.7M | Approximately 1 TP4T35B (€32.7B) |
| TTM Sales Growth Rate (YoY) | +23.8% | +11.4% | +11.5% | +15.6% |
| Operating Profit Margin (TTM) | 35.0% | 31.9% | 41.2% | Approx. 32% |
| Preceding P/E | 47.3 | 38.5 | 49.1 | About 48 |
| Key differentiators | No. 1 in Etching & Deposition, Significant Exposure to Memory/HBM | Largest comprehensive equipment company | Virtual monopoly on inspection and measurement | EUV Lithography 100% Exclusive |
Lam Research leads its competitors in revenue growth rate (+23.81 TP3T). This is because it directly benefits from the investment cycles in memory (DRAM and NAND) and HBM.
On the other hand, the valuation is burdensome at a forward P/E of 47x. General equipment company No. 1 AI semiconductor equipment manufacturer Applied Materials (AMAT)Its forward P/E is relatively low at 38x, so AMAT has the advantage in terms of valuation alone.
In the field of lithography ASML, which monopolizes EUV lithographyThey possess a separate moat. Lam Research is in etching and deposition, ASML in lithography, and KLA in inspection and measurement, so their domains are closer to mutual complementarity than direct competition.
Lam Research Growth Outlook and Key Drivers
There are three growth drivers. First, the expansion of HBM for AI GPUs; second, the demand for etching and deposition processes due to the increase in the number of layers in 3D NAND; and third, the transition to advanced logic such as Gate All Around (GAA).
The company raised its 2026 WFE market size forecast from the previous 135B to 140B, even suggesting an upside bias. This implies that Lam Research's revenue leading indicators are trending upward.
The growth rate assumption was estimated at approximately 14.41 TP3T by taking the weighted average (0.4/0.4/0.2) of the historical sales CAGR of approximately 101 TP3T, the analyst consensus of approximately 201 TP3T, and the industry (WFE) growth rate of approximately 121 TP3T.
However, demand for memory equipment is sensitive to the DRAM and NAND price cycles. The overall recovery trend in the semiconductor industry is Analog Devices (ADI), a beneficiary of the semiconductor industry recovery This can also be confirmed in the analysis.
Lam Research 12-Month Target Price Scenario
| scenario | Target Price (USD) | Target price (KRW) | Compared to the current price | Probability |
|---|---|---|---|---|
| Bull | $480 | Approximately 740,640 won | +26.6% | 25% |
| Base | $405 | Approximately 624,915 won | +6.8% | 50% |
| Bear | $295 | Approximately 455,185 won | -22.2% | 25% |
The base scenario is the result of applying a forward P/E of approximately 44x to the 12-month forward earnings per share (approx. $8~9), with a target price of $405 (approx. 624,915 won). It assumes that the AI capex cycle continues robustly.
The bullish scenario at $480 (approx. 740,640 KRW) assumes a further upward trend in the WFE market and accelerated HBM expansion, aligning with the highest target prices of some investment banks. The bearish scenario at $295 (approx. 455,185 KRW) reflects a slowdown in memory capex and a de-rating of the multiple.
The reason for setting the scenario probabilities at 501 TP3T for the base and 251 TP3T each for the bullish and bearish scenarios is that the strong upside from structural demand for AI and the strong downside from valuations significantly exceeding historical averages are in balance. The weighted expected return is approximately +4.51 TP3T, which corresponds to the Hold zone.
Lam Research Recent Major Issues
The Q3 FY26 results, announced on April 22, 2026, exceeded consensus estimates for both revenue and profit, and the company provided quarterly guidance for June with revenue of $6.60B (approx. 10.1838 trillion KRW) ± $400M and non-GAAP EPS of $1.65 ± $0.15. Details are as follows. Company IR Press ReleaseIt can be seen in.
As of June 2026, major investment banks such as BofA (target price $480), Wells Fargo ($450), Citi ($450), and Cantor Fitzgerald ($425) have successively raised their target prices. This is driven by upward revisions in the WFE market outlook and accelerating demand for AI.
The stock price surged by approximately 2,891 TP3T over the past year, approaching its 52-week high (1 TP4T, 409.75). However, volatility has also increased, with the stock falling by about 5.71 TP3T in a single day due to profit-taking on recent trading days.
Key Risks When Investing in Lam Research
Valuation burden → The current price exceeds both the analyst average target price ($340.58) and the DCF fair value ($90–$165). → Monitoring indicators: Forward P/E, deviation from the average target price.
China's sales and export regulations → Due to the high proportion of sales in China, additional export controls could result in a revenue gap. → Monitoring indicators: Quarterly sales share in China, U.S. Department of Commerce regulatory announcement.
memory capex cycles → Equipment investment by memory customers could plummet if DRAM and NAND prices fall → Monitoring indicators: HBM and NAND prices, changes in WFE guidance.
High volatility → With a beta of 1.87, volatility is high relative to the market, and profit-taking pressure persists following a sharp rise of +2,891 TP3T over the past year. → Monitoring indicators: Trading volume, deviation from the 50-day and 200-day moving averages. Highly volatile AI semiconductor stocks are AI Data Center Timing Semiconductor SI Time (SITM)Divided access is valid as in.
Lam Research Investment Opinion Conclusion
Lam Research's investment rating is Hold, and the confidence level is Medium.
Direct benefits from the AI and HBM supercycle, record-high quarterly earnings, and the upward trend in the WFE market are clear strengths. However, the current price, at forward P/E of 47x and P/B of 45x, significantly exceeds its intrinsic value (DCF $90–$165) and even surpasses the average analyst target price ($340.58).
With a weighted expected return of approximately +4.51 TP3T, the risk-to-reward ratio for new entries is not attractive. Existing holders should leverage the trend, while a staggered approach during corrections is reasonable for new purchases. The investment period is based on 12 months.
Recommended articles to read together: Analysis of Earnings and Target Price of AI Inference Semiconductor Cellebras (CBRS).
5 Frequently Asked Questions about Lam Research
Q1. What is the 12-month target price for Lam Research (LRCX)?
Based on the base scenario, the level is $405 (approx. 624,915 KRW), suggesting a bullish range of $480 (approx. 740,640 KRW) and a bearish range of $295 (approx. 455,185 KRW). The weighted expected return is approximately +4.5%, placing it in the Hold zone.
Q2. Why is Lam Research classified as a beneficiary of AI and HBM?
This is because the production of HBM and 3D NAND for AI GPUs is driving demand for etching and deposition process equipment, and Lam Research is the global leader in this field. The company raised its 2026 WFE market forecast to $140B.
Q3. Is Lam Research's current stock price overvalued or undervalued?
With forward P/E at 47x and P/B at 45x, it significantly exceeds the historical average (approximately 15–20x). The DCF fair value is $90–$165, which is significantly lower than the current price of $379.09 (approximately 584,936 KRW), indicating that it is overvalued relative to its intrinsic value.
Q4. Which is more attractive, Lam Research or Applied Materials (AMAT)?
While Lam Research (+23.81 TP3T) has a higher revenue growth rate than AMAT (+11.41 TP3T), AMAT (38x) has a lower forward P/E than Lam Research (47x). Lam Research has the advantage in growth momentum, while AMAT has the edge in valuation attractiveness.
Q5. What is the biggest risk when investing in Lam Research?
First, there is valuation pressure (the current price exceeds the average target price and DCF fair value); second, the proportion of sales in China and export restrictions; and third, the slowdown in the memory capex cycle. WFE guidance and the proportion of sales in China must be monitored.
Sources
- Lam Research Form 10-Q (Quarterly Closed 2026-03-29, SEC EDGAR)
- Lam Research Q3 FY26 Earnings Press Release (Company IR)
- Lam Research Analyst Target Price Consensus (MarketBeat)
This article is an analysis for informational purposes only and is not an investment recommendation. All investment decisions and responsibilities rest solely with the investor. The data is based on June 29, 2026, and the applicable exchange rate is 1 USD = 1,543 KRW.
※ This content is based on publicly available data, written with the help of AI tools, and reviewed by the author. It is for informational purposes only and is not an investment recommendation.