Should You Buy Lam Research Stock Before Q1 Earnings Release?

Lam Research Corporation LRCX is scheduled to release its first-quarter fiscal 2026 results on Oct. 22. The company expects revenues of $5.2 billion (+/- $300 million) for the first quarter. The Zacks Consensus Estimate is pegged at $5.22 billion, indicating 25.3% growth from the figure reported in the year-ago quarter.Lam Research expects earnings of $1.20 (+/- $0.10) for the first quarter. The consensus mark for first-quarter earnings has been revised upward by 2 cents to $1.21 per share over the past 60 days, implying a 40.7% year-over-year increase.Image Source: Zacks Investment ResearchLam Research has an impressive earnings surprise history. In the last reported quarter, LRCX delivered an earnings surprise of 10.8%. The company’s earnings beat the Zacks Consensus Estimate in each of the trailing four quarters, the average surprise being 6.7%.Lam Research Corporation Price and EPS Surprise Lam Research Corporation price-eps-surprise | Lam Research Corporation QuoteEarnings Whispers for Lam ResearchOur proven model predicts an earnings beat for Lam Research this earnings season. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the chances of an earnings beat, which is the case here.Earnings ESP: Earnings ESP, which represents the difference between the Most Accurate Estimate ($1.23) and the Zacks Consensus Estimate ($1.21), is +1.26%. You can uncover the best stocks to buy or sell before they are reported with our Earnings ESP Filter.Zacks Rank: LRCX carries a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank stocks here.Factors Likely to Influence LRCX’s Q1 ResultsLam Research has been riding on the wave of a strong rebound in the semiconductor industry, driven by the surging demand for memory and advanced AI applications. The rise in spending on AI and machine learning, particularly with the growing influence of Generative AI, is likely to have provided a significant boost to the company's performance in the fiscal first quarter. The increasing need for advanced AI-centric chips has become a key growth catalyst.Heightened dynamic random access memory (DRAM) spending, especially in response to demand for high-bandwidth memory, is likely to have played in Lam Research's favor. The company's momentum in 3D DRAM and advanced packaging technologies is also expected to have added to its strong performance. At the same time, ongoing technological advancements are pushing NAND spending higher, which is likely to contribute to LRCX’s quarterly results.Lam Research’s focus on expanding semiconductor fabrication capabilities, along with its heavy investment in research and development, positions it well in a competitive landscape. Its innovation through Semiverse solutions, particularly in high-aspect-ratio memory hole etch for NAND, is likely to have fueled this progress. LRCX’s strategic investments in cutting-edge technologies are anticipated to have bolstered its performance in the foundry and logic segment, while the increasing adoption of 3D architectures is expected to have supported growth in its etch and deposition services.The company’s robust suite of tools, which enable foundry logic inflections, is likely to have secured strong customer traction. With the accelerating deployment of 5G and the Internet of Things (IoT), Lam Research’s semiconductor and memory solutions remain in high demand, reinforcing its market position in the fiscal first quarter.All these factors are likely to have driven growth in system revenues. Our model estimate for first-quarter system revenues is pegged at $3.43 billion, implying year-over-year growth of 43.2%, underscoring Lam Research’s continued strength in the evolving tech landscape. Our model estimate for the Customer Support segment’s first-quarter revenues is pegged at $1.79 billion, indicating a year-over-year increase of 0.7%.LRCX Stock Price Performance & ValuationLam Research shares have surged 95.9% year to date, outperforming the Zacks Electronics – Semiconductors industry, which has risen 39.8%. The stock has also surpassed major semiconductor equipment providers, including KLA Corporation KLAC, ASML Holding ASML and Applied Materials AMAT. Shares of KLA Corporation, ASML Holding and Applied Materials have soared 75.6%, 48.5% and 38.3%, respectively.YTD Price Return PerformanceImage Source: Zacks Investment ResearchLet us look at the value Lam Research offers investors at current levels. Currently, LRCX is trading at a discount, with a forward 12-month P/E of 30.14X compared with the industry’s 37.55X.LRCX Forward 12-Month P/E RatioImage Source: Zacks Investment ResearchCompared with semiconductor giants, the stock trades at a lower multiple than ASML Holding and KLA Corporation, while at a higher multiple than Applied Materials. At present, ASML Holding, KLA Corporation and Applied Materials have forward 12-month P/E of 34.39X, 30.56X, and 23.89X, respectively.Investment Thesis on LRCX StockLam Research is benefiting from powerful shifts in semiconductor demand, particularly around AI and data center chips. These advanced chips require complex manufacturing, and Lam provides the essential tools, like deposition and etching systems, needed to build them.In 2024 alone, Lam Research shipped more than $1 billion worth of products tied to next-gen chip technologies and packaging. The figure is expected to triple in 2025. LRCX’s equipment is especially critical as the industry moves toward innovations like backside power delivery and dry-resist processing.Lam Research’s steady investments in research & development and new products are paying off. Its Cryo 3.0 technology has set new standards in the industry, and the Aether dry-resist system is being adopted, especially for high-bandwidth DRAM.Expanding its manufacturing operations in Asia has also helped the company lower costs and improve margins. In the fourth quarter of fiscal 2025, Lam Research’s non-GAAP operating margin increased by 160 basis points to 34.4% year over year.Final Thoughts: Buy Lam Research Stock for NowLam Research’s reasonable valuation, strong financials and clear focus on AI-related growth make it a good investment choice right now. Its market position in AI and data center chipmaking, combined with ongoing innovation, should keep driving long-term gains.#1 Semiconductor Stock to Buy (Not NVDA)The incredible demand for data is fueling the market's next digital gold rush. As data centers continue to be built and constantly upgraded, the companies that provide the hardware for these behemoths will become the NVIDIAs of tomorrow.One under-the-radar chipmaker is uniquely positioned to take advantage of the next growth stage of this market. It specializes in semiconductor products that titans like NVIDIA don't build. It's just beginning to enter the spotlight, which is exactly where you want to be.See This Stock Now for Free >>Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report KLA Corporation (KLAC): Free Stock Analysis Report ASML Holding N.V. (ASML): Free Stock Analysis Report Lam Research Corporation (LRCX): Free Stock Analysis Report Applied Materials, Inc. (AMAT): Free Stock Analysis ReportThis article originally published on Zacks Investment Research (zacks.com).Zacks Investment ResearchWeiter zum vollständigen Artikel bei Zacks Weiter zum vollständigen Artikel bei Zacks