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Investing.com - Needham raised its price target on Lam Research (NASDAQ:LRCX) to $115.00 from $110.00 on Thursday, maintaining a Buy rating following the company’s quarterly earnings report. The stock, currently trading near its 52-week high of $102.59, has delivered an impressive 38% return year-to-date.
Lam Research reported stronger-than-expected quarterly results and increased its calendar year 2025 wafer fabrication equipment (WFE) outlook from $100 billion to $105 billion, citing upside in China demand. According to InvestingPro data, the company maintains strong profitability with a 48% gross margin and has shown robust revenue growth of 20% over the last twelve months.
The semiconductor equipment manufacturer guided third-quarter 2025 results significantly above consensus, driven primarily by continued growth in China revenue, which is expected to account for more than 35% of total revenue in the period.
While Lam Research noted increased spending by multinational companies in China, Needham indicated that significant domestic China WFE growth is likely the main factor behind the exceptional strength in the region.
Management expects China strength to fade in the fourth quarter of 2025, potentially returning total revenue and gross margins to first-quarter 2025 levels, though Needham’s calendar year 2026 estimates were revised upward despite this projected slowdown.
In other recent news, Lam Research Corp . reported its fourth-quarter 2025 earnings, surpassing Wall Street expectations with notable figures. The company achieved a revenue of $5.17 billion, which exceeded the forecasted $4.99 billion. Additionally, earnings per share (EPS) came in at $1.33, beating the anticipated $1.20. In another development, Summit Insights downgraded Lam Research’s stock rating from Buy to Hold. The downgrade was based on expectations of moderating wafer fabrication equipment spending in 2026. Despite the downgrade, Summit Insights maintained a positive outlook on technology upgrades driving performance in the second half of 2025. These upgrades include industry transitions to Gate-All-Around, backside power, and dry EUV photo resist, which are seen as potential growth drivers for the company.
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