Lam Research Corporation
Orin's own judgment of how firmly the evidence points one way — not the chance the price goes up.
Lam Research's fundamentals remain strong — FY2026 revenue of $23.2B grew 26.0% YoY with operating margin expanding to 35.3%, and the company has beaten EPS estimates for eight consecutive quarters including the just-reported $2.20 actual versus $2.18 estimate as of the period ended 21 Oct.
However, the latest beat was razor-thin at 0.92% versus prior quarters that delivered 7–10% surprises, and the stock has broken below both its 50-day ($307.46) and 200-day ($282.85) moving averages with RSI at 32.55 and a deeply negative MACD histogram of -7.39 as of 20 Oct. With hedge funds reportedly dumping chip stocks at the fastest pace in a decade, smart money at -0.079 as of the quarter ended 30 Jun, and net insider selling of $154.6M over 24 months, the risk-reward is balanced but not yet compelling enough to add risk ahead of clarity on whether the earnings deceleration and technical breakdown are transient or structural.
What could go wrong
- Thinning earnings beat momentum. The most recent EPS surprise was just 0.92% ($2.20 vs $2.18 estimate) versus 7.7–9.9% surprises in prior quarters, suggesting estimate expectations may be catching up and upside surprise potential is fading.
- FCF margin compression. FCF margin declined from 29.4% in FY2025 to 21.1% in FY2026 despite 26.0% revenue growth, indicating capital intensity or working capital headwinds are absorbing cash flow.
- Technical breakdown and flow pressure. Price at $263.45 sits well below both the 50-day ($307.46) and 200-day ($282.85) MAs with RSI at 32.55 and MACD histogram at -7.39; Goldman reports hedge funds dumped chip stocks at the fastest pace in a decade.
- Insider and smart money divergence. Net insider selling of $154.6M over 24 months with 65 dispositions versus 1 acquisition, and smart money score at -0.079 as of the quarter ended 30 Jun, suggest those with closer visibility are reducing exposure.
What would change my mind
Where this comes from: fundamentals, year to 28 Jun · earnings vs estimates, 21 Oct · technicals, 20 Oct · peer comparison. Orin's read on LRCX; not advice.
How has the share price moved?
Up 53.5% over twelve months, from $156.90 on 27 Oct 2025 to $240.85 at the Tue 27 Oct 2026 close. Its highest close in that time was $433.33 on 30 Jun 2026; the last close is 44.4% below it.
- Green line: the closing price each trading day.
- Grey line: the average closing price over the last 50 trading days.
- Dashed amber line: the same over the last 200 trading days — a slower, smoother line.
- Bars along the bottom: shares traded each day — green when it closed higher than the day before, rose when lower (the most, 38.5M, on 19 Dec 2025).
- Flags: the company's filings, on the day they were made (a 10-Q is the quarterly report and a 10-K the annual report; an 8-K reports a major event).
- Rose flags: large share sales by the company's own officers and directors, from the Form 4 each one files after trading.
On file
All LRCX filingsLargest holders · 13F Q2 2026
Money flow| Filer | Position | Of fund |
|---|---|---|
| BlackRock | $57.5B | 0.9% |
| Vanguard Capital Management | $35.4B | 0.8% |
| State Street | $26.3B | 0.8% |
| Invesco | $22.7B | 1.8% |
| JPMorgan Chase | $18.6B | 1.0% |
| Vanguard Portfolio Management | $15.9B | 0.7% |
| Geode Capital Management | $14.9B | 0.8% |
| FMR | $14.6B | 0.6% |
| T. Rowe Price Associates | $10.7B | 1.1% |
| Morgan Stanley | $8.3B | 0.4% |
181 of the 815 filers we track · quarter ended Q2 2026 · positions, not flows
Insiders, last 24 months: 175 Form 4 filings; open-market trades net −$161.7M. Of the 50 on hand, 0 were open-market purchases and 37 sales — the rest are grants, option exercises and tax withholding.
Ask Orin about LRCX
Orin answers questions about LRCX from its filings, transcripts and numbers — with the source behind every claim. Your own desk starts with 3 free days, card required.
Start 3 free days →How is it priced, against its own past and its sector?
Priced at 35.7× its last 12 months of profit (Tue 27 Oct close); the typical Technology company on the NASDAQ is at 46.1×.
| Measure | Now | Its usual | Sector |
|---|---|---|---|
| P/E | 35.7× | — | 46.1× |
| P/S | 11.5× | — | — |
| EV/EBITDA | 29.3× | — | — |
| P/B | 21.7×above usual | 12.7× | — |
- P/E: no usual level — it ran from 13.7× to 71.0× over its last 5 fiscal years, so a middle value says little.
- P/S: no usual level — it ran from 3.65× to 22.2× over its last 5 fiscal years, so a middle value says little.
- EV/EBITDA: no usual level — it ran from 11.3× to 59.1× over its last 5 fiscal years, so a middle value says little.
- "Its usual" is the middle of its own last 5 fiscal years.
P/E: the share price divided by one year of profit per share — roughly how many years of today's profit the price pays for. A company that loses money has no P/E.
P/S: the company's total market value divided by one year of revenue. Used when there is no profit to measure.
EV/EBITDA: the price of the whole company (its shares plus its debt, minus its cash) divided by one year of operating profit before interest, tax and write-downs.
P/B: the share price divided by the book value per share — what the company owns minus what it owes, as its accounts record it. When book value is tiny, P/B swings wildly and says little.
What do the analysts who cover it publish?
The analysts' average 12-month price target is $376 (from $290 to $500) — 56% above the Tue 27 Oct close price. That is their published opinion, not Orin's.
$376
$290 – $500 · +56% against the last close
- 22 buy or overweight
- 2 hold
- 0 underweight or sell
Price target: the share price an analyst publishes for about 12 months ahead. It is the opinion of the firm that wrote it; the average is across the firms that cover the company.
Overweight / underweight: analysts' rating words: overweight means the firm expects the stock to do better than the others it covers, underweight worse. Their words, not Orin's.
How is it priced next to the companies it is compared to?
Priced at 35.7× its last 12 months of profit; the middle P/E of the 5 companies it is compared to that made a profit is 41.7×.
| Company | Market value | P/E | EV/EBITDA | Gross margin | Net margin | ROE |
|---|---|---|---|---|---|---|
| LRCXLam Research Corporation | $301B | 35.7× | 29.3× | 51.1% | 32.3% | 72% |
| ACMRACM Research, Inc. | $3B | 23.0× | 9.1× | 43.5% | 10.2% | 7% |
| AMATApplied Materials, Inc. | $314B | 33.9× | 27.3× | 49.4% | 30.1% | 40% |
| ASMLASML Holding N.V. | $630B | 42.0× | 34.2× | 54.3% | 34.1% | 64% |
| KLACKLA Corporation | $201B | 41.7× | 33.9× | 61.3% | 35.6% | 85% |
| VECOVeeco Instruments Inc. | $2B | 78.6× | 39.8× | 37.4% | 3.6% | 3% |
- The list of companies is the data vendor's choice, so it can include a company a person would not have picked.
Market value: the share price times the number of shares — what the whole company is priced at.
P/E: the share price divided by one year of profit per share — roughly how many years of today's profit the price pays for. A company that loses money has no P/E.
EV/EBITDA: the price of the whole company (its shares plus its debt, minus its cash) divided by one year of operating profit before interest, tax and write-downs.
Gross margin: the share of each $1 of sales left after the direct cost of making what was sold.
Net margin: the share of each $1 of sales kept as profit after every cost. Below zero, the company lost money.
ROE: return on equity: one year of profit as a share of the shareholders' money in the business (its book value).
Is it priced high or low compared with its own past?
Priced at 35.7× its last 12 months of profit (Tue 27 Oct close). It has no full fiscal year on file since its history starts, so there is nothing of its own to compare with.
- Now35.7×
P/E: the share price divided by one year of profit per share — roughly how many years of today's profit the price pays for. A company that loses money has no P/E.
Fiscal year (FY): the company's own 12-month accounting year, which need not match the calendar year.
How has its sector been priced?
Technology companies on the NASDAQ were priced at a typical 46.1× their yearly profit (Tue 27 Oct close).
- Now46.1×
- Each year is the middle of that calendar year's daily sector P/E; "Now" is the Tue 27 Oct close figure, the same one in the table above.
Sector P/E: the middle P/E of the companies in the same sector on the same stock exchange, as the data vendor works it out each day.
What does a cash-flow model say a share is worth?
A standard cash-flow model puts it at $59 a share — 75% below the $240.06 price it was computed against (27 Oct).
| Model | Value a share | Against the price then |
|---|---|---|
| Standard | $59 | 75% below $240.06 |
| Levered | $61 | 75% below $240.06 |
Discounted cash flow: a model's estimate of what the company is worth today, from the cash it is forecast to make in future years. Small changes in the forecast move it a lot, and it says little about a company that loses money.
Standard / levered: two versions of the cash-flow model: the standard one counts the cash before the company pays its lenders, the levered one after.