Shares of Lam Research (LRCX) rose about 4% premarket on Thursday after fiscal second quarter results and outlook surpassed estimates, drawing positive reactions from analysts.
RBC Capital Markets kept its Outperform rating on Lam and raised the price target to $290 from $260, noting that strong wafer fabrication equipment, or WFE, and favorable technology transitions drove the company’s solid outlook.
“LRCX reported strong Dec-25Q results driven by healthy WFE environment and share gains. Management sees ~23% WFE growth in 2026, above our expectations, and believes that the company can continue to outgrow the market. While NAND spending remains lumpy, LRCX has made solid progress in Foundry and is benefiting from CoWoS/HBM [Chip-on-Wafer-on-Substrate/High Bandwidth Memory] strength,” said analysts led by Srini Pajjuri.
The analysts expect WFE momentum to sustain into 2027 on the back of generative AI, or GenAI, demand and extreme supply tightness in memory. Tech transitions such as MolyB, Backside Power, and 4F2 offer additional tailwinds, the analysts added.
Morgan Stanley maintained its Equal-weight rating on Lam but increased the price target on the shares to $244 from $211.
“We are in an unprecedented period for WFE, and LAM’s 2026 WFE guidance surpassed even bullish expectations. With multiple levers for outperformance, we expect LAM to continueexecuting across all fronts,” said analysts led by Shane Brett.
The analysts noted that Lam’s earnings were not necessarily a surprise. However, the company’s forward-looking industry commentary significantly exceeded expectations. Lam guided to 2026 WFE growth of 23% (from $110B to $135B), driven by strength in DRAM and leading-edge logic.
Brett and his team noted that this compares favorably with their prior WFE growth forecast of 16%. The analysts added that Lam’s management also indicated that risk is skewed to the upside, noting that “basically every customer is asking for pull-ins” and that the company expects “growth every quarter from the previous quarter.”
KeyBanc Capital kept its Sector Weight rating on Lam’s shares.
“LRCX rose after F2Q earnings beat and guide above. We thought Lam would need to be extraordinarily bullish to justify recent price action, and it delivered. LRCX indicated all market segments should grow in CY26, it should outgrow its +23% CY26 WFE forecast, and it has the best multiyear visibility ever,” said analysts led by Steve Barger.
The analysts think that Lam is exceptionally well positioned for evolving market conditions, but it will need continued market demand, flawless execution, and limited external disruptions.
Shares of other chip equipment makers on Thursday. ASML (ASML) jumped about 4%, while Applied Materials (AMAT) and KLA (KLAC) each rose nearly 2%.