Lam Research stock price target cut to $90 by Cantor Fitzgerald

On Monday, Cantor Fitzgerald adjusted its price target for Lam Research Corporation (NASDAQ:LRCX), a leading supplier of wafer fabrication equipment and services to the semiconductor industry. The new target is set at $90.00, down from the previous $100.00, while maintaining an Overweight rating on the stock. InvestingPro data shows the company maintains strong fundamentals with a healthy 47.7% gross margin and impressive 50% return on equity, supporting its position as a prominent player in the Semiconductors & Semiconductor Equipment industry.

The firm anticipates a modest outperformance for Lam Research’s March quarter results, followed by a slight upward revision for the June quarter. This expectation is underpinned by demand for NAND upgrades, TSMC, and High Bandwidth (NASDAQ:BAND) Memory (HBM), which are all anticipated to contribute positively to the company’s performance. With revenue growth of 13.2% over the last twelve months and a solid financial health score rated as GOOD by InvestingPro, the company appears well-positioned to capitalize on these market opportunities.

From a broader economic standpoint, Cantor Fitzgerald views Wafer Fabrication Equipment (WFE) spending as relatively stable, particularly noting that the primary spenders for the calendar year 2025, such as TSMC, SK Hynix, and Micron (NASDAQ:MU), are less likely to reduce their spending given the ongoing robust demand for Artificial Intelligence (AI). Although NAND capital expenditures have been subdued, they are expected to see modest growth, primarily driven by upgrades—a segment where Lam Research is believed to have a significant market share.

Cantor Fitzgerald also predicts a decrease in spending on lagging-edge technology, especially in China, which could affect Lam’s Reliant business. However, this is not expected to significantly overshadow the positive momentum for the company. The firm forecasts Lam to outperform the overall WFE market in the calendar year 2025.

One uncertainty highlighted by Cantor Fitzgerald is the potential impact of tariffs on manufacturing inputs, which could be a factor to monitor. Nevertheless, Lam’s production facilities in Fremont and Malaysia might mitigate the adverse effects of any tariffs between the U.S. and China.

Looking ahead to the company’s earnings, Cantor Fitzgerald expects consensus earnings per share (EPS) for the calendar year 2025 to rise to $4.00 post-results, compared to the current consensus of $3.81. Despite the lowered price target, the firm believes that a price-to-earnings (P/E) ratio of 19.5 times the calendar year 2026 EPS estimate is justified, supporting the upside to the $90 target. This represents a more than 30% potential upside from the current trading levels, reinforcing Cantor Fitzgerald’s Overweight rating on Lam Research stock. InvestingPro analysis reveals the stock trades at an attractive PEG ratio of 0.70, suggesting potential value relative to its growth prospects. Subscribers can access 13 additional ProTips and comprehensive valuation metrics in the Pro Research Report.

In other recent news, Lam Research has been the focus of several analyst reports following its Analyst Day event. The company presented a robust financial model projecting $25-27 billion in revenue by 2028, with gross margins of 50% and operating margins of 34-35%. Stifel analysts maintained a Buy rating with a $100 target, citing Lam’s expanding portfolio and expected market outperformance. Cantor Fitzgerald also held a $100 target, emphasizing Lam’s technological advancements and projected market share increase in the Wafer Fabrication Equipment (WFE) market. Meanwhile, TD Cowen raised its price target to $110, highlighting Lam’s potential market share gains and strong growth outlook, particularly in Atomic Layer Deposition and conductor etch technologies. Additionally, Susquehanna upgraded Lam Research to Positive from Neutral, with a new price target of $125, pointing to the company’s strategic expansion and potential benefits from Samsung (KS:005930)’s Memory business recovery. The analysts also noted Lam’s financial strategy, including a 30% free cash flow margin target and a significant share buyback authorization. These developments reflect a broad confidence among analysts in Lam Research’s strategic direction and growth potential.

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