Hold Rating for Lam Research Amid Near-Term Challenges and Optimistic Long-Term Growth Potential
Shane Brett CFA has assigned a Hold rating to Lam Research, citing near-term challenges such as declining NAND revenue and potential gross margin drops. Despite these issues, the company has outperformed estimates recently, indicating conservative market expectations. Looking ahead, there is optimism for growth driven by 2026 Wafer Fab Equipment guidance and early supply chain signs. However, stock performance will likely depend on customer announcements rather than the company's earnings. Wells Fargo also maintains a Hold rating with a $135 price target.
Shane Brett CFA has given his Hold rating due to a combination of factors impacting Lam Research’s near-term performance and future outlook. The company’s second-half numbers are expected to be lackluster, with a notable decline in NAND revenue and a potential drop in gross margins due to an unfavorable customer mix. Despite these challenges, the company has consistently outperformed street estimates in recent quarters, which suggests that the market’s expectations may be slightly conservative.
Looking ahead, Shane Brett CFA is optimistic about Lam Research’s potential for growth, particularly with the anticipated 2026 Wafer Fab Equipment (WFE) guidance, which is expected to show moderate growth and potential outperformance. Additionally, there are early signs of supply chain preparations for shipment growth in the first half of the year. However, the analyst highlights that customer announcements and earnings, rather than the company’s own earnings, will likely be the main drivers of stock performance, suggesting a cautious approach in the near term.
In another report released on October 3, Wells Fargo also maintained a Hold rating on the stock with a $135.00 price target.
