Lam Research stock price target raised to $165 from $155 at UBS

Investing.com - UBS raised its price target on Lam Research (NASDAQ:LRCX) to $165 from $155 while maintaining a Buy rating, citing stronger-than-expected guidance and constructive commentary on calendar year 2026. The stock, which has delivered an impressive 96% return over the past year according to InvestingPro data, currently trades near its 52-week high of $153.69.

UBS analyst Timothy Arcuri noted that Lam Research’s management effectively projected earnings per share of approximately $5.25-5.50 for 2026, which the firm considers conservative given management’s typical guidance approach. UBS’s own estimate stands higher at $5.64 per share. With current trailing twelve-month earnings at $4.15 per share and robust revenue growth of 23.7%, InvestingPro analysis shows the company maintaining strong profitability metrics with a healthy 48.7% gross margin.

The firm identified three key factors driving Lam Research’s market share gains: strong NAND demand driven by enterprise solid-state drives (eSSD), share gains in DRAM with its new conductor etch tool (Akara), and increasing share in foundry business, especially at TSMC.

UBS highlighted that Lam Research’s share of wafer fabrication equipment (WFE) has increased approximately 260 basis points this year to about 12.4%, with artificial intelligence applications expected to contribute significant additional revenue to the WFE sector.

Based on these factors, UBS revised its calendar 2026/2027 earnings per share estimate to $6.46 and refreshed its valuation multiple, resulting in the new $165 price target. With a current P/E ratio of 33.6x and strong growth prospects, investors seeking deeper insights into Lam Research’s valuation and growth potential can access comprehensive analysis and 20 additional ProTips through InvestingPro’s detailed research reports.

In other recent news, Lam Research reported its fiscal first-quarter results, surpassing Wall Street expectations with a diluted earnings per share of $1.26, compared to the forecast of $1.22. The company’s revenue also exceeded predictions, reaching $5.32 billion, above the anticipated $5.22 billion. Additionally, Lam Research provided December quarter guidance of $5.20 billion, which exceeded the consensus expectation of $4.8 billion. Following these results, Stifel raised its price target for Lam Research to $160, maintaining a Buy rating, while Mizuho increased its target to $170, keeping an Outperform rating. Goldman Sachs reiterated its Buy rating and set a price target of $160, despite anticipating that the stock may remain range-bound. These developments reflect a positive outlook from analysts, although some market challenges are noted.

This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.