Lam Research (LRCX) Stock Forecast & Price Target

Lam Research has demonstrated a strong position in the semiconductor wafer fabrication equipment market, increasing its global market share from approximately 10% to 15% over the past decade, positioning it as a prominent growth entity driven by effective share gains. With expectations for service revenue to grow 1.5 times from CY24 levels and 2 times as the semiconductor industry approaches $1 trillion in revenues by CY28, the financial outlook remains robust, supported by solid gross margins of 50.6% amid favorable product mix despite challenges like tariffs. Additionally, management's confidence in continued expansion of the serviceable available market (SAM) through advanced technologies such as CFET (sub 1nm) further reinforces the positive growth trajectory anticipated for the company.

The financial outlook for Lam Research is negatively impacted by lower revenue guidance for China, largely due to new U.S. government export regulations known as the "50% rule," which is anticipated to reduce sales by $600 million in calendar year 2026. This regulatory environment, combined with a shift in customer mix and declining domestic spending in China, is expected to further lower gross margins to 48.5%. As China is projected to constitute less than 30% of total sales by calendar year 2026, Lam Research may experience a pronounced decline in revenue in this crucial market, potentially exceeding that of its peers.