LRCX Earnings: Record Revenue, $6.6B Guidance, and the Memory Supercycle Driving Lam Research's Best Quarter Ever

Key takeaways

Lam Research had its best quarter ever, driven by a surge in memory and advanced packaging, with revenue exceeding expectations.
The industry is ramping up wafer fab equipment spending to $140 billion annually, indicating robust future demand.
Memory market share in Lam's revenue is rising and is expected to continue growing in upcoming years.
Advanced packaging revenues are expected to grow over 50% in 2026, supporting the company's growth story.
Lam is committing to shareholder value through significant stock buybacks even at all-time high stock prices.
The acceleration of NAND investments suggests a strong near-term growth trajectory for Lam and the industry.

Summary

Lam Research's Record Quarter and Industry Position

The podcast opens with a discussion on Lam Research's exceptional Q3 fiscal year 2026 results, reporting over $5.84 billion in revenue, surpassing expectations and demonstrating a 24% year-over-year growth. The company has seen continued margin expansion and robust earnings, driven largely by the surge in the memory market and advanced packaging. Lam is positioned within the wafer fab equipment segment, crucial for the semiconductor supply chain, especially as the industry rekindles its focus on memory chips, which have become more valuable due to shortages and increased demand. The company's strategic move of repurchasing shares at all-time highs signals confidence in its growth trajectory.

Impact of Memory Market and Industry Outlook

The podcast highlights the increasing importance of the memory segment in Lam's revenue, now constituting approximately 39%, with room to grow as the memory crunch affects broader markets such as smartphones. The acceleration of a $40 billion NAND conversion project, now expected to complete before 2027, is a key driver for future equipment sales. Industry-wide, wafer fab equipment spending is being raised to $140 billion annually, signaling robust capital expenditure and a positive outlook for suppliers like Lam.

Growth Drivers: Advanced Packaging and Customer Support

A significant growth area for Lam Research is advanced packaging, with revenues projected to grow over 50% in 2026. This complements their core business of deposition and etching tools. Additionally, their customer support segment reached a record $2 billion, providing a dependable recurring revenue stream that adds resilience against future downturns. Management’s continued share buybacks, totaling nearly $800 million, at all-time highs further reflect confidence in the company's future.

Future Guidance and Market Expectations

Looking ahead, Lam Research has provided guidance for the upcoming quarter, expecting around $6.6 billion in revenue, exceeding analyst estimates of $6.1 billion. The management has also increased industry-wide wafer fab equipment spending forecasts, boosting industry confidence and suggesting that Lam is well-positioned for an extended revenue runway. The podcast notes that Lam has become the largest semiconductor equipment holding in their portfolio, overtaking older positions like Applied Materials, thanks to its strong growth and industry tailwinds.

Show notes

Lam Research just reported its best quarter ever — and then guided the next quarter to $6.6 billion in revenue. Wall Street was expecting $6.1 billion.

In this episode, Nick and Kasey break down everything that matters from Lam Research's Q3 fiscal year 2026 earnings: the headline numbers, the mix shift toward memory, the advanced packaging growth story, what management's $796 million share buyback at all-time highs is actually communicating, and why Lam has quietly become CSI's largest semiconductor equipment holding — overtaking Applied Materials, where their conviction started over a decade ago.

There is also the acceleration of the $40 billion NAND conversion investment timeline, now expected to complete before the end of 2027 — a significant pull-forward that increases near-term equipment demand for exactly the etch and deposition tools that Lam dominates.

What we cover:

— Q3 FY2026 results: $5.84B revenue, +24% year over year, EPS beat, gross margin approaching 50%

— Q4 guidance: $6.6B vs. $6.1B analyst consensus — what the gap means for the cycle

— Memory mix rising to 39% of systems revenue and why it has further to run in 2026 and 2027

— Advanced packaging revenues targeted to grow over 50% in calendar year 2026

— Customer support segment hits a record $2B — the recurring revenue cushion for the next downturn

— The $796M share buyback at all-time highs — management's unambiguous signal

— The $40B NAND conversion acceleration and what it means for Lam's revenue runway

— Wafer fab equipment spending raised to $140B annually — the industry-wide read-through

— Why Lam has become CSI's largest fab equipment holding

Sponsored by fiscal.ai — the platform powering CSI's KPI charts and financial data. Get 15% off at fiscal.ai/csi

Disclosure: Nick and Kasey are Lam Research shareholders. This content is for general information only and is not individual investment advice. All investing involves risk.

chipstockinvestor.com