LRCX
LAM RESEARCH CORPNasdaqValuation snapshot
Above bull casePrice is above even the bull case.
Price as of Aug 17, 2026 · Valuation Aug 12, 2026
What drives LRCX's base case?
base-case thesisRecent results show broad strength in new equipment, spare parts, and advanced-chip manufacturing demand. The base case assumes those forces continue, but growth slows as today's factory-building cycle becomes larger and harder to repeat. Lam preserves most of its recent profitability because its installed base and technology positions support service sales and disciplined pricing.
What shapes the assumptions
Foundry represented 0.58 of nine-month equipment and upgrade revenue
Foundry equipment demand
Raises revenue growth
Customer-support revenue rose to 5874812000 over nine months
Service, spares, upgrades, and Reliant sales
Raises revenue growth
Quarterly profitability increased to about 0.35
Profit retained from revenue
Raises operating margin
Nine-month effective tax rate was 0.126
Cash taxes on operating profit
Raises tax rate
Capital spending funded manufacturing capacity and laboratories
Cash reinvested in growth capacity
Raises reinvestment
Each driver links a business metric to the forecast assumption it shapes — the basis for this case, not investment advice.
Why the gap?
The market is pricing this as if revenue grows 60.1% a year. Over the last 5 years it grew 10.3% a year — so the price assumes far more than it has delivered.
What else could explain it?›
- How much of this is timing?
- The price has risen 6.7% since this valuation was struck on 2026-08-12, so some of the gap opened up after these figures were set.
- How confident is this estimate?
- Robustness 57.0/10 (Moderate) — some of any gap is our own uncertainty rather than disagreement.
- What would change the answer?
- Which assumption this valuation swings on, and by how much.
Many combinations of assumptions reproduce the same price. These are ways to read what the market might be expecting, not the market's actual view. How this is worked out
Research & assumptions
Inspect the valuation thesis, cases, risks, evidence, and model inputs.
View details
Research & assumptions
Inspect the valuation thesis, cases, risks, evidence, and model inputs.
Three independently researched cases generated automatically from published financials. Every assumption is justified and cited; the discount rate is computed from researched market inputs.
Base inputs from financials
source period →Base revenue (TTM)
$21.7B
Diluted shares
1,257,325,000
Net cash
$1.9B
Bear
low confidence$37.74
IV / share
-88.6% vs $332.36
- Explicit cash flows
- $14.02
- Terminal value
- $22.19
- Net cash
- $1.53
- Intrinsic value / share
- $37.74
58.8% of the value rests on the terminal value — elevated dependency.
Revenue growth6.0% → 4.0% → 3.0% → 2.5% → 2.0%medium
How derived: Starting from three quarters of growth above 0.22 and management's strong June-quarter guidance, the forecast assumes that export restrictions, concentrated China exposure, and the equipment cycle cause growth to fall quickly toward mature-industry levels.
Why this confidence: Near-term management guidance ↑, Cyclical five-year forecast horizon ↓
Evidence for
- China represented 0.37 of nine-month revenue, while Lam warned that export controls have limited its market and could impair future revenue further.[Lam FY2026 Q3 Form 10-Q]· primary
Evidence against
- Management guided the June 2026 quarter to revenue of 6600000000, plus or minus 400000000, after reporting record March-quarter revenue.[March 2026 results and outlook]· primary
Operating margin31.0%medium
How derived: Starting from the recent rise to 0.35, the assumption allows a reversal toward prior trough profitability as lower equipment volume and adverse geographic mix reduce operating leverage.
Why this confidence: Reported profitability trend ↑, Sensitivity to equipment-cycle volume ↓
Evidence for
- Lam identifies rapid changes in semiconductor demand and possible export-control effects on both revenue and competitive position, creating downside operating-leverage risk.[Lam FY2026 Q3 Form 10-Q]· primary
Evidence against
- The March-quarter result was 0.35 and management guided the June quarter to 0.365, plus or minus 0.01.[March 2026 results and outlook]· primary
Tax rate16.0%low
How derived: Starting from the nine-month effective rate of 0.126, the assumption adds a substantial buffer for a less favorable earnings mix, global minimum-tax implementation, and fewer discrete tax benefits.
Why this confidence: Company tax disclosures ↑, Uncertain international tax rules and earnings mix ↓
Evidence for
- Lam states that the effect of countries implementing global minimum-tax rules remains uncertain and that its tax rate depends heavily on the geographic mix of earnings.[Lam FY2026 Q3 Form 10-Q]· primary
Evidence against
- Lam's nine-month effective tax rate was 0.126 because a material portion of income was earned in lower-tax jurisdictions.[Lam FY2026 Q3 income-tax note]· primary
Reinvestment rate22.0%low
How derived: Starting from capital and intangible spending of 777604000 during the first nine months, the assumption raises total reinvestment to 0.22 of after-tax operating profit to reflect weaker working-capital efficiency and continued manufacturing and laboratory investment.
Why this confidence: Reported capital and working-capital cash flows ↑, Reinvestment definition requires normalization across a cycle ↓
Evidence for
- Operating cash flow included a 1053956000 use from changes in operating assets and liabilities, demonstrating that working capital can absorb meaningful cash during expansion.[Lam FY2026 Q3 Form 10-Q]· primary
Evidence against
- Nine-month capital and intangible spending was only 777604000 against 4400429000 of operating cash flow, indicating a relatively asset-light operating model.[Lam FY2026 Q3 cash flows]· primary
Terminal growth1.8%low
How derived: Starting from Lam's exposure to long-lived demand for increasingly complex chips, the assumption discounts that opportunity for cyclicality, export restrictions, competition, and eventual industry maturity.
Why this confidence: Product relevance to identified chip-architecture transitions ↑, Very long forecast horizon ↓
Evidence for
- Lam's Akara platform addresses future gate-all-around, advanced DRAM, and 3D NAND manufacturing requirements, supporting durable demand for more complex processing steps.[Akara product announcement]· primary
Evidence against
- Lam warns that expanded export controls could reduce its addressable market and strengthen competitors not subject to the same restrictions.[Lam FY2026 Q3 Form 10-Q]· primary
Base
low confidence$57.92
IV / share
-82.6% vs $332.36
- Explicit cash flows
- $19.87
- Terminal value
- $36.53
- Net cash
- $1.53
- Intrinsic value / share
- $57.92
63.1% of the value rests on the terminal value — elevated dependency.
Revenue growth12.0% → 10.0% → 8.0% → 6.0% → 4.5%medium
How derived: Starting from recent growth above 0.22 and management's June-quarter revenue guidance, the forecast assumes AI-related foundry, DRAM, NAND, and service demand remain healthy but normalize steadily as the current investment cycle matures.
Why this confidence: Management guidance and reported segment mix ↑, Semiconductor capital-spending cyclicality ↓
Evidence for
- Nine-month growth was driven predominantly by increased foundry equipment spending, while customer-support revenue also increased because of higher spares demand.[Lam FY2026 Q3 Form 10-Q]· primary
Evidence against
- Lam warns that semiconductor-equipment demand changes rapidly and that China restrictions have already limited its market.[Lam FY2026 Q3 Form 10-Q]· primary
Operating margin35.0%medium
How derived: Starting from the latest reported level of 0.35 and management's next-quarter guide of 0.365, the assumption retains most recent scale benefits while allowing some normalization in mix and spending.
Why this confidence: Latest result and one-quarter guidance agree ↑, Five-year product and geographic mix uncertainty ↓
Evidence for
- Reported profitability improved sequentially to 0.35, and management guided the following quarter to 0.365, plus or minus 0.01.[March 2026 results and outlook]· primary
Evidence against
- Lam states that supply costs, manufacturing constraints, trade rules, and changes in customer spending can materially affect profitability.[Lam FY2026 Q3 Form 10-Q]· primary
Tax rate14.0%medium
How derived: Starting from the nine-month effective rate of 0.126, the assumption normalizes above recent results to remove discrete benefits and allow for moderate global minimum-tax and geographic-mix pressure.
Why this confidence: Stable recent nine-month tax rate ↑, International tax-law uncertainty ↓
Evidence for
- The nine-month effective tax rate was 0.126 and was broadly consistent with the prior-year period.[Lam FY2026 Q3 income-tax note]· primary
Evidence against
- Lam says the ultimate effect of global minimum-tax adoption remains uncertain and that changes in earnings geography can alter the rate.[Lam FY2026 Q3 Form 10-Q]· primary
Reinvestment rate17.0%medium
How derived: Starting from modest capital spending relative to operating cash generation, the assumption reinvests 0.17 of after-tax operating profit to fund laboratories, manufacturing capacity, research, and normal working-capital growth.
Why this confidence: Detailed reported cash-flow data ↑, Future working-capital needs vary with shipment timing ↓
Evidence for
- Lam said nine-month capital spending primarily supported manufacturing capacity and laboratory infrastructure.[Lam FY2026 Q3 Form 10-Q]· primary
Evidence against
- Capital and intangible spending represented a relatively small portion of operating cash flow, suggesting that incremental revenue does not require proportionate physical investment.[Lam FY2026 Q3 cash flows]· primary
Terminal growth2.5%low
How derived: Starting from recurring service demand and the rising process complexity of advanced memory and logic devices, the assumption uses durable nominal growth below the explicit forecast while recognizing mature-industry competition and cyclicality.
Why this confidence: Recurring installed-base support demand ↑, Terminal-period assumptions are inherently unobservable ↓
Evidence for
- Customer-support revenue includes service, spares, upgrades, and mature-node equipment, providing a recurring stream tied to Lam's installed base.[Lam FY2026 Q3 Form 10-Q]· primary
Evidence against
- Lam identifies rapid demand changes, intense competition, trade restrictions, and customer spending variability as continuing risks.[Lam FY2026 Q3 Form 10-Q]· primary
Bull
low confidence$80.37
IV / share
-75.8% vs $332.36
- Explicit cash flows
- $25.83
- Terminal value
- $53.02
- Net cash
- $1.53
- Intrinsic value / share
- $80.37
66.0% of the value rests on the terminal value — elevated dependency.
Revenue growth18.0% → 15.0% → 12.0% → 9.0% → 6.0%low
How derived: Starting from recent growth above 0.22, record March-quarter revenue, and strong June-quarter guidance, the forecast assumes sustained AI infrastructure investment, memory transitions, advanced packaging, and product-share gains keep growth elevated before a gradual fade.
Why this confidence: Current growth, guidance, and production wins ↑, Sustained double-digit growth requires a prolonged capital-spending cycle ↓
Evidence for
- Lam reported record March-quarter revenue, attributed momentum to AI-driven demand, and guided the next quarter materially above the March result.[March 2026 results and outlook]· primary
- Akara was selected as a production tool of record for multiple advanced DRAM and foundry applications, with repeat orders and a growing installed base.[Akara product announcement]· primary
Evidence against
- China supplied 0.37 of nine-month revenue, and Lam says additional export controls could materially reduce sales and strengthen foreign competitors.[Lam FY2026 Q3 Form 10-Q]· primary
Operating margin38.0%low
How derived: Starting from 0.35 in the March quarter and guidance of 0.365 for June, the assumption adds further scale, service mix, and product-value benefits while remaining below a scenario of uninterrupted incremental leverage.
Why this confidence: Clear recent incremental profitability ↑, Target exceeds the latest reported and guided levels ↓
Evidence for
- Profitability rose sequentially to 0.35 and management guided to 0.365 as quarterly revenue scaled toward 6600000000.[March 2026 results and outlook]· primary
Evidence against
- Lam cautions that supply-chain costs, customer spending changes, export rules, and manufacturing constraints can reduce profitability.[Lam FY2026 Q3 Form 10-Q]· primary
Tax rate13.0%medium
How derived: Starting from the nine-month effective rate of 0.126, the assumption keeps the rate near its recent level because the lower-tax international earnings mix persists, while excluding the unusually low single-quarter result.
Why this confidence: Stable recent normalized tax rate ↑, International tax-policy uncertainty ↓
Evidence for
- Lam's nine-month effective tax rate was 0.126, with the difference from the U.S. statutory rate primarily due to income earned in lower-tax jurisdictions.[Lam FY2026 Q3 income-tax note]· primary
Evidence against
- Lam states that global minimum-tax implementation, audits, tax-law changes, and shifts in the geographic mix of income could increase its effective rate.[Lam FY2026 Q3 Form 10-Q]· primary
Reinvestment rate13.0%low
How derived: Starting from strong operating cash generation and comparatively modest physical capital spending, the assumption treats product development and the installed service network as scalable enough to support high growth with 0.13 of after-tax operating profit reinvested.
Why this confidence: Strong reported cash conversion ↑, High-growth working-capital requirements are volatile ↓
Evidence for
- Lam generated 4400429000 of operating cash during the first nine months while spending 777604000 on capital expenditures and intangible assets.[Lam FY2026 Q3 cash flows]· primary
Evidence against
- Working-capital changes consumed 1053956000 during the same period, showing that rapid shipment growth can require substantial additional cash.[Lam FY2026 Q3 Form 10-Q]· primary
Terminal growth3.0%low
How derived: Starting from recurring installed-base support and Lam's exposure to increasingly complex 3D memory and advanced logic processes, the assumption allows durable nominal growth while fading well below the explicit-period rate.
Why this confidence: Large installed base and identified future process transitions ↑, Very long duration and competitive uncertainty ↓
Evidence for
- Lam says Akara can address gate-all-around logic, advanced planar and 3D DRAM, and 3D NAND, while its established Kiyo family has more than 30000 chambers in production.[Akara product announcement]· primary
Evidence against
- Lam's filing describes semiconductor equipment as highly competitive and historically subject to rapid demand changes, with material geopolitical and export-control exposure.[Lam FY2026 Q3 Form 10-Q]· primary
Valuation robustness
reliability of the estimate, not a stock rating57 / 100 · Moderate
Formula v1.0.0. Higher means a more reliable estimate — not a recommendation.
Quality checks
Automated model-risk flags — warnings, not recommendations.
- The terminal growth assumption is low-confidence.→ terminal growth
Per-share economics
Business growth after changes in the diluted share count.
| Period | Revenue growth | FCF/share | FCF/share growth | Shares | Share growth |
|---|---|---|---|---|---|
| Q1 2025 | 19.7% | 1.12 | 70.3% | 1.3B | -2.1% |
| Q2 2025 | 16.4% | 0.43 | -57.7% | 1.29B | -2.3% |
| Q3 2025 | 24.4% | 0.79 | -18.7% | 1.29B | -2.1% |
| Q1 2026 | 27.7% | 1.26 | 12.3% | 1.27B | -2.7% |
| Q2 2026 | 22.1% | 0.97 | 125.4% | 1.26B | -2.3% |
| Q3 2026 | 23.8% | 0.64 | -18.7% | 1.26B | -2.4% |
Valuation history every run
Why intrinsic value changed
Sequential deterministic bridge · order-dependent contributions · exactly reconciled
Market inputs researched
The value is the U.S. Treasury's 10-year nominal par yield reported for 2026-07-31, the latest observation available in the cited official table.
The value is the observed five-year market beta for LRCX, reflecting substantially greater historical price variability than the broad equity market.
The value is the forward-looking implied U.S. equity risk premium based on trailing twelve-month adjusted payout as of 2026-07-01.
The value is LRCX's regular-session closing price on 2026-08-12.
Generated 8/12/2026, 11:37:26 PM · pipeline v1.1.0