Lam Research Corp. (LRCX) First Take In line quarter, with very strong guidance

Equity Research 29 July 2026 | 4:15PM EDT

Lam Research Corp. (LRCX): First Take: In-line quarter, with very strong guidance

Key stock takeaways: We expect the stock to trade modestly higher following an James Schneider, Ph.D. | in-line quarter with guidance that came in well above the Street relative to elevated Goldman Sachs & Co. LLC investor expectations heading into the print. We believe investor positioning has Anmol Makkar been bullish heading into the quarter given announcements from memory suppliers | on pulling in cleanroom capacity (particularly in DRAM), as well as continued Goldman Sachs & Co. LLC

strength in foundry CapEx from TSMC and others. We expect the following topics to Luya You | be in focus on the earnings call: (1) DRAM momentum and cleanroom expansion Goldman Sachs & Co. LLC timelines, (2) any potential upside to 2H revenue inflection guidance; (3) China Khalil Fenina revenue share dynamics; (4) any potential uptick in NAND spending beyond | technology transitions. Goldman Sachs & Co. LLC

Quarterly results in line with the Street: Lam reported revenue of $6.72 bn, below GS at $6.94 bn but just above the Street (Visible Alpha) at $6.69 bn, while gross margin of 52.0% was above GS at 50.8% and the Street at 50.7%. Systems revenue of $4.25 bn was below GS at $4.79 bn and the Street at $4.55 bn, and Service (CSBG) revenue of $2.37 bn was well above GS and the Street at $2.15 bn.

3Q guidance is well above the Street. Lam guided 3Q well above the Street on revenue and margins. Revenue was guided to $8.10 bn at the midpoint, which is well above GS at $7.32 bn and the Street at $7.13 bn. Operating margin was guided to 39.5%, well above GS at 37.0% and the Street at 37.1%. Non-GAAP EPS guidance of $2.00-$2.20 (midpoint of $2.15) was well above GS at $1.85 and the Street at $1.83.

Read-through to our coverage: We expect a modestly positive initial reaction for AMAT (Buy) in our coverage given similar end-market exposure.

Price target and risks: Our 12-month target price of $380 reflects a 35X P/E multiple applied to our normalized EPS of $10.75. Key downside risks: (1) pause in upgrade spending from the NAND suppliers; (2) incrementally punitive export restrictions released by the US government; (3) marked shift in the industry’s need for lithography (increase in intensity) vis-a-vis deposition/etch applications.

Goldman Sachs does and seeks to do business with companies covered in its research reports. As a result, investors should be aware that the firm may have a conflict of interest that could affect the objectivity of this report. Investors should consider this report as only a single factor in making their investment decision. For Reg AC certification and other important disclosures, see the Disclosure Appendix, or go to Analysts employed by non-US affiliates are not registered/qualified as research analysts with FINRA in the U.S.

Goldman Sachs Lam Research Corp. (LRCX)

Exhibit 1: Lam Research - Variance summary 2Q26 Financials ($ mn, except EPS) Actual GS Street Actual/GS Actual/Street Total Systems 4,250 4,791 4,545 -11.3% -6.5% Service (CSBG) 2,472 2,153 2,154 14.8% 14.8% Total Revenue 6,722 6,944 6,690 -3.2% 0.5% QoQ 15.1% 19% 14.5% YoY 30.0% 34% 29.4% Gross Margin 52.0% 50.8% 50.7% +124 bps +129 bps Operating Margin 38.4% 36.9% 36.8% +151 bps +160 bps Non-GAAP EPS $1.82 $1.79 $1.70 1.7% 7.2%

Source: Company data, Goldman Sachs Global Investment Research, Visible Alpha Consensus Data

Exhibit 2: Lam Research - Guidance 3Q26E Financials ($ mn, except EPS) High Low Guidance (midpoint) GS Street Guidance/GS Guidance/Street Total Systems 5,120 4,950 -100.0% -100.0% Service (CSBG) 2,196 2,191 -100.0% -100.0% Total Revenue 8,500 7,700 8,100 7,316 7,127 10.7% 13.6% QoQ 20.5% 5.4% 6.0% YoY 52.1% 37.4% 33.9% Gross Margin 53.0% 51.0% 52.0% 50.7% 50.7% +128 bps +128 bps Operating Margin 40.5% 38.5% 39.5% 37.0% 37.1% +252 bps +240 bps Non-GAAP EPS $2.30 $2.00 $2.15 $1.85 $1.83 16.2% 17.6%

Source: Company data, Goldman Sachs Global Investment Research, Visible Alpha Consensus Data

LRCX 12m Price Target: $380.00 Price: $269.61 Upside: 40.9%

Buy GS Forecast 6/25 6/26E 6/27E 6/28E Market cap: $339.0bn Revenue ($ mn) 18,435.6…