Shares surged as much as 7.9% to $272.35 on Thursday morning after Lam Research delivered a quarter that silenced bears — and raised the stakes for what comes next. The chip-equipment giant posted its fourth straight quarter of record revenue , but the real jolt was forward guidance that came in nearly $1 billion above Wall Street expectations, betting the farm on an AI spending wave that shows no sign of cresting.
• A Clean Earnings Beat, Top to Bottom
Lam reported fourth-quarter revenue of $6.72 billion, beating analyst estimates of $6.67 billion, and adjusted earnings of $1.82 per share versus the $1.68 consensus.
Gross margin hit 52%, the highest quarterly level in 20 years.
For the full fiscal year, diluted EPS reached a record $5.82, up 41% from fiscal 2025. These aren't incremental improvements — they suggest Lam is extracting meaningfully more profit from each dollar of equipment it ships.
• Next Quarter's Guidance Is the Real Story
Lam guided fiscal first-quarter revenue to a range of $7.70 billion to $8.50 billion, versus estimates of $7.09 billion.
It expects adjusted EPS of $2.00 to $2.30, far above the $1.83 consensus. That midpoint — roughly $8.1 billion in sales — implies sequential growth of over 20%, a pace almost unheard of outside of a major industry upcycle. For shareholders, this is the clearest signal yet that chipmakers are accelerating orders for the specialized etching and deposition machines Lam sells.
• AI Is Reshaping Where the Money Comes From
Management said AI demand is driving stronger spending in NAND flash memory, DRAM, and advanced chip manufacturing.
NAND equipment sales doubled from the prior quarter , a dramatic turnaround for a segment that dragged on the company during the 2023 downturn. Meanwhile, revenue from China declined from 34% to 26% of total sales , reducing a geopolitical risk that has weighed on the stock.
• The Stock Is Cheaper Than It Looks — or More Fragile Even after today's pop, LRCX sits roughly 15% below its July high near $320. The median analyst price target is $375 , implying about 38% upside. Lam raised its long-term margin targets to gross margins in the mid-50s% and operating margins in the mid-40s%. But insiders have made 54 open-market trades in six months — all sales, zero purchases — a pattern worth watching if the AI spending cycle stumbles.