Lam Research Corporation designs, manufactures, markets, refurbishes, and services semiconductor processing equipment used in the fabrication of integrated circuits. The company offers ALTUS systems to deposit conformal films for tungsten metallization applications; SABRE electrochemical deposition products for copper interconnect transition that offers copper damascene manufacturing; SOLA ultraviolet thermal processing products for film treatments; and VECTOR plasma-enhanced CVD ALD products. It also provides SPEED gapfill high-density plasma chemical vapor deposition products; and Striker single-wafer atomic layer deposition products for dielectric film solutions. In addition, the company offers Flex for dielectric etch applications; Kiyo for conductor etch applications; Syndion for through-silicon via etch applications; and Versys metal products for metal etch processes. Further, it provides Coronus bevel clean products to enhance die yield; Da Vinci, DV-Prime, EOS, and SP series products to address various wafer cleaning applications; and Metryx mass metrology systems for high precision in-line mass measurement in semiconductor wafer manufacturing. The company sells its products and services to semiconductors industry in the United States, China, Europe, Japan, Korea, Southeast Asia, Taiwan, and internationally. The company was incorporated in 1980 and is headquartered in Fremont, California.

Lam Research appears to be a fundamentally strong company, but its current valuation is already noticeably ahead of the industry. Profitability is very high: ROE of 66.97%, ROA of 33.17%, and ROI of 49.83% are all significantly above the median, and their 5-year trend remains steadily upward. Net profit margin of 31.27% and operating margin of 34.26% are also strong and continue to improve, confirming the quality of the business and cost discipline. Revenue, gross profit, EBITDA, and net income are all growing year over year, so the company’s operating base is expanding rather than deteriorating. Liquidity is comfortable: a current ratio of 2.63 and quick ratio of 1.91 indicate a solid cushion, while debt/equity of 0.30 looks moderate and even better than the industry median. At the same time, long-term debt has not increased over the period, which reduces financial risk. The weak point is the multiples: P/E of 50.38, P/S of 15.76, P/B of 25.23, and P/FCF of 74.82 are all significantly above industry benchmarks, meaning the market is already pricing in a very high level of quality and expectations. Dividend yield has almost disappeared, so the dividend factor is not supporting the valuation at this point. Gross margin is around the industry median, so there is little additional advantage in gross efficiency here. Overall, the fundamentals justify a premium to the sector, but not such a large one as to aggressively raise the target price. For an investor, this is a story of strong quality with solid earnings growth, but with a notable risk of overvaluation and limited upside without further acceleration in results.

Lam Research Corporation

Сильный индекс, значительно упал. Быки в растерянности.

Strong index, significantly down. The bulls are confused.

Слабый индекс, значительно упал. Рынок на стороне быков.

Weak index, significantly down. The market is on the bulls' side.

Слабый индекс, незначительно упал

Strong profitability and revenue growth support the premium, but very high P/E, P/S, P/B, and P/FCF ratios indicate significant overvaluation.

Key Points
Demand for AI and memory chips has increased the demand for semiconductor equipment.
As chips get more advanced, equipment turnover increases, which leads to higher sales for equipment makers.
These three stocks are positioned at the center of this opportunity and have outperformed some of the biggest chipmakers this year.
AI chips and memory chips have been two of the hottest AI sectors, but focusing exclusively on chips may cause investors to miss out on another big opportunity in the artificial intelligence (AI) industry.
While tech giants continue to line up and pay higher prices for these chips, chipmakers need specialized semiconductor equipment to meet demand. Without this equipment, it is impossible to create the same chips that are in such high demand.
Missed Nvidia in 2009? This Rare Signal Is Flashing Again. In 2009, a "Double Down" signal flashed for a little-known chipmaker called Nvidia. For the first time in years, that same "Total Conviction" signal is flashing for a company 1/100th the size of Nvidia. Continue »
Some semiconductor equipment companies have been outperforming chipmakers this year thanks to rising demand and limited focus on individual stocks. These are some of the top semiconductor equipment makers that are the bedrock for the entire chip industry.
Applied Materials
Applied Materials (NASDAQ: AMAT) is a leading semiconductor equipment maker that reported "unprecedented demand" for its materials engineering solutions. It has R&D partnerships with leading chipmakers and universities to help the company create equipment for the next generation of chips. As these investments take shape, the company continues to deliver meaningful revenue growth.
Sales surged by 25% year over year in its fiscal 2026 third quarter ended July 26, as the company expanded its gross margins for the 13th consecutive quarter. That type of pricing power should continue as AI tailwinds accelerate.
Samsung (OTC: SSNLF) is a long-term customer that is part of Applied Materials' R&D efforts. The former locked in 70% of its memory chip supply with tech leaders through 2031. Samsung will need Applied Materials' equipment to create all of those chips, which makes revenue visible for years.
It's no wonder Applied Materials Chief Executive Officer Gary Dickerson said that the company "expect[s] another strong growth year for [the company] in 2027." Applied Materials is aiming for $10.25 billion in fiscal 2026 fourth-quarter revenue, which represents more than a 12% sequential growth rate.
Lam Research
Lam Research (NASDAQ: LRCX) has surged by more than 70% this year, soundly outperforming chipmakers Nvidia (NASDAQ: NVDA) and Broadcom (NASDAQ: AVGO), which both happen to be customers. Lam Research's advanced wafer fabrication equipment is a major enabler of AI chips.
As AI chips get more advanced, turnover for Lam Research's equipment increases. A faster turnover translates into more product sales and higher revenue growth. It's the complete opposite of the auto industry, where people are holding on to their vehicles for as long as possible, limiting automobile companies' growth rates.
Lam Research has seen this phenomenon in its financial results. Revenue increased by 15% sequentially, driven by increased demand for AI chips, which necessitates more semiconductor equipment. The projected midpoint of $8.1 billion in Q3 revenue implies 21% sequential growth.
Applied Materials and Lam Research are well-established semiconductor equipment companies with market caps approaching $400 billion. Cohu (NASDAQ: COHU) is a much smaller company with a market cap of about $2.5 billion that is posting high growth rates for its chip testing equipment.
With that equipment, chipmakers and hyperscalers can ensure that the chips they sell work properly before customers receive them. Naturally, the soaring demand for AI chips has increased demand for Cohu's equipment.
The company posted 38% year-over-year revenue growth in the second quarter and raised its annual AI-driven compute opportunity pipeline to about $850 million. Q3 sales are forecast to rise to $170 million at the midpoint, marking a gain of more than 12% sequentially.
Cohu has also widened its margins meaningfully during this stretch. A $16.9 million net loss in Q2 2025 narrowed to a $0.2 million net loss in the most recent quarter. This improvement, combined with the broader semiconductor opportunity, suggests that Cohu can achieve profitability and quickly improves its margins. With its AI-driven compute opportunity, surging profits can warrant an a higher valuation.
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Marc Guberti has positions in Broadcom. The Motley Fool has positions in and recommends Applied Materials, Broadcom, Lam Research, and Nvidia. The Motley Fool has a disclosure policy.

Investors Who Have Been Following AI Chips and Memory Chips May Be Forgetting About the Vital Industry That Enables Both of Them

The S&P 500 Index ($SPX) (SPY) closed down -0.58% on Thursday, the Dow Jones Industrial Average ($DOWI) (DIA) closed down -0.60%, and the Nasdaq 100 Index ($IUXX) (QQQ) closed down -1.08%. E-mini S&P futures (ESU26) fell -0.61%, and September E-mini Nasdaq futures (NQU26) fell -1.07%.
Stock indexes settled lower on Thursday, with the S&P 500 and Dow Jones Industrials dropping to 5-week lows. Soaring energy prices pushed global bond yields sharply higher on Thursday, weighing on stocks. WTI crude oil surged more than +6% on Thursday to a 3.5-month high amid fears that the US-Iran war will persist, increasing inflation risks and prompting the world’s central banks to keep raising interest rates. The 10-year UK Gilt yield jumped to a 19-year high today of 5.38%, the 10-year German Bund yield surged to a 17-year high of 3.51%, and the 10-year T-note yield rose to a 2.75-year high of 4.96%.
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Stocks added to their losses on Thursday, and T-note yields climbed further after US Aug PPI rose more than expected, signaling persistent price pressures, and after weekly jobless claims remained low, signaling labor market strength.
US weekly initial unemployment claims fell -1,000 to 206,000, close to expectations of 205,000 and signaling a stable labor market.
US Aug PPI final demand rose +5.4% y/y, stronger than expectations of +5.3% y/y. Aug PPI ex-food and energy rose +4.6% y/y, right on expectations.
US Aug existing home sales fell -2.0% m/m to a 14-month low of 3.98 million, right on expectations.
The escalating trade war between the US and Canada is also weighing on market sentiment. On Tuesday, Canada imposed tariffs of 15% to 50% on hundreds of US goods in retaliation for the US action last month to impose 50% tariffs on $20 billion of imports from Canada. The US responded by moving to block imports of some Canadian products and slapping new tariffs on others, as well as seeking to bar Canadian companies from selling to US government contractors.
Oct WTI crude oil prices (CLV26) surged more than +6% on Thursday to a 3.5-month high. Crude prices are climbing after Iran said that it is ready for a more intense war and will escalate counterstrikes if the US continues attacking its territory and infrastructure. The prospect of a lengthy conflict that limits crude supplies from the Middle East is underpinning crude oil prices. Crude oil prices added to their gains on Thursday after Saudi Arabia told OPEC that its crude production in August fell to 6.238 million bpd, the lowest since 1990.
The markets are discounting a 75% chance of a +25 bp rate hike at the next FOMC meeting on September 15-16.
Overseas stock markets settled mixed on Thursday. The Euro Stoxx 50 dropped to a 6-week low and closed down -0.67%. China's Shanghai Composite closed down -0.43%. Japan's Nikkei-225 Stock Average closed up +0.20%.
Interest Rates
December 10-year T-notes (ZNZ6) closed down by -23 ticks. The 10-year T-note yield rose +10.7 bp to 4.948%. T-notes tumbled to a 2.75-year nearest futures low on Thursday, and the 10-year T-note yield rose to a 2.75-year high of 4.963%. T-notes sold off as crude oil prices surged, which boosted inflation expectations. WTI crude oil rose more than +6% on Thursday to a 3.5-month high, lifting the 10-year breakeven inflation rate to a 3.25-month high of 2.419%.
On the positive side for T-notes was the decline in US Aug existing home sales to a 14-month low. T-notes also found support on strong demand for the Treasury’s $22 billion auction of 30-year T-bonds that had a bid-to-cover ratio of 2.61, well above the 10-auction average of 2.40.
European government bond yields moved sharply higher on Thursday. The 10-year German bund yield jumped to a 17-year high of 3.508% and finished up +5.7 bp to 3.501%. The 10-year UK gilt yield soared to a 19-year high of 5.376% and finished up +11.2 bp to 5.374%.
The ECB, as expected, raised the deposit facility rate by 25 bp to 2.50% and said inflation will stay above 2% for an "extended period."
The ECB raised its 2026 Eurozone GDP forecast to +0.9% from a prior forecast of +0.8%, and kept its 2026 inflation ex-food and energy forecast unchanged at 2.5%.
Markets are discounting a 97% chance of a +25 bp ECB rate hike at the ECB’s next meeting on October 29.
US Stock Movers
Chipmakers and AI-infrastructure stocks retreated on Thursday, pressuring the broader market. CoreWeave (CRWV), Intel (INTC), and Lam Research (LRCX) closed down more than -5%, and Micron Technology (MU) and Western Digital (WDC) closed down more than -4%. Also, ARM Holdings (ARM), SanDisk (SNDK), Advanced Micro Devices (AMD), KLA Corp (KLAC), Marvell Technology (MRVL), and Applied Materials (AMAT) closed down more than -3%, and Nvidia(NVDA), ASML Holding NV (ASML), and Seagate Technology Holdings Plc (STX) closed down more than -2%.
Copper-producing stocks are falling today, with copper prices down more than -4% after Reuters reported that the White House has not yet made a decision on refined copper tariffs as it weighs concerns of higher prices raising manufacturing costs against the potential benefits of encouraging more domestic mining. Southern Copper (SCCO) closed down more than -7%, and Freeport-McMoRan (FCX) closed down more than -6%. Also, Rio Tinto Plc (RIO) closed down more than -4%, and Newmont Corp (NEM) closed down more than -2%.
Home builders and suppliers moved lower on Thursday after the 10-year T-note yield jumped to a 2.75-year high, pushing up mortgage rates and weighing on housing demand. Lennar (LEN), KB Home (KBH), and Builders Firstsource (BLDR) closed down more than -3%. Also, DR Horton (DHI) and Pulte Group (PHM) closed down more than -2%, and Toll Brothers (TOL) and Home Depot (HD) closed down more than -1%.
Cooper Cos (COO) closed down more than -14% to lead losers in the S&P 500 after reporting Q3 net sales of $1.07 billion, below the consensus of $1.10 billion, and cutting its full-year revenue forecast to $4.23 billion to $4.25 billion from a previous forecast of $4.29 billion to $4.32 billion, weaker than the consensus of $4.31 billion.
American Eagle Outfitters (AEO) closed down more than -13% after reporting Q2 comparable sales rose +6.00%, weaker than the consensus of +6.47%.
FactSet Research Systems (FDS) closed down more than -5% after OpenAI said it’s releasing ChatGPT for Financial Services, a new tool for investment bankers and equity researchers.
AeroVironment (AVAV) closed up more than +4% after reporting Q1 revenue of $480.5 million, stronger than the consensus of $455.8 million.
Apple (AAPL) closed up more than +3% to lead gainers in the Dow Jones Industrials after analysts were generally positive about the company’s new iPhone Duo, its first foldable phone.
Earnings Reports (9/11/2026)
Kroger Co/The (KR) and Rent the Runway Inc (RENT).
On the date of publication, Rich Asplund did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. For more information please view the Barchart Disclosure Policy here.
More news from Barchart

Stocks Settle Lower as Surging Crude Prices Boost Fed Rate Hike Chances

The S&P 500 Index ($SPX) (SPY) is down -0.42% today, the Dow Jones Industrial Average ($DOWI) (DIA) is down -0.43%, and the Nasdaq 100 Index ($IUXX) (QQQ) is down -0.69%. E-mini S&P futures (ESU26) are down -0.40%, and September E-mini Nasdaq futures (NQU26) are down -0.65%.
Stock indexes are under pressure today, with the S&P 500 and Dow Jones Industrials dropping to 5-week lows. Soaring energy prices are pushing global bond yields higher today, weighing on stocks. WTI crude oil is up more than +3% today at a 3.5-month high amid fears that the US-Iran war will persist, increasing inflation risks and prompting the world’s central banks to keep raising interest rates. The 10-year UK Gilt yield rose to a 19-year high today of 5.36%, the 10-year German Bund yield climbed to a 15-year high of 3.50%, and the 10-year T-note yield rose to a 2.75-year high of 4.93%.
Join 200K+ Subscribers: Find out why the midday Barchart Brief newsletter is a must-read for thousands daily.
Stocks added to their losses today, and T-note yields climbed further after US Aug PPI rose more than expected, signaling persistent price pressures, and after weekly jobless claims remained low, signaling labor market strength.
US weekly initial unemployment claims fell -1,000 to 206,000, close to expectations of 205,000 and signaling a stable labor market.
US Aug PPI final demand rose +5.4% y/y, stronger than expectations of +5.3% y/y. Aug PPI ex-food and energy rose +4.6% y/y, right on expectations.
US Aug existing home sales fell -2.0% m/m to a 14-month low of 3.98 million, right on expectations.
The escalating trade war between the US and Canada is also weighing on market sentiment. On Tuesday, Canada imposed tariffs of 15% to 50% on hundreds of US goods in retaliation for the US action last month to impose 50% tariffs on $20 billion of imports from Canada. The US responded by moving to block imports of some Canadian products and slapping new tariffs on others, as well as seeking to bar Canadian companies from selling to US government contractors.
Oct WTI crude oil prices (CLV26) are up more than +3% today at a 3.5-month high. Crude prices are climbing after Iran said that it is ready for a more intense war and will escalate counterstrikes if the US continues attacking its territory and infrastructure. The prospect of a lengthy conflict that limits crude supplies from the Middle East is underpinning crude oil prices. Crude oil prices added to their gains today after Saudi Arabia told OPEC that its crude production in August fell to 6.238 million bpd, the lowest since 1990.
The markets are discounting a 72% chance of a +25 bp rate hike at the next FOMC meeting on September 15-16.
Overseas stock markets are mixed today. The Euro Stoxx 50 dropped to a 6-week low and is down -0.42%. China's Shanghai Composite closed down -0.43%. Japan's Nikkei-225 Stock Average closed up +0.20%.
Interest Rates
December 10-year T-notes (ZNZ6) are down by -17 ticks. The 10-year T-note yield is up +7.3 bp to 4.914%. T-notes tumbled to a 2.75-year nearest futures low, and the 10-year T-note yield rose to a 2.75-year high of 4.928%. T-notes are under pressure from higher crude oil prices, which are boosting inflation expectations. WTI crude oil is up more than +3% today at a 3.5-month high, lifting the 10-year breakeven inflation rate to a 3.25-month high of 2.408%. Supply pressures are also weighing on T-notes as the Treasury will auction $22 billion of 30-year T-bonds later today. T-notes added to their losses today after Aug PPI rose more than expected.
European government bond yields are moving higher today. The 10-year German bund yield climbed to a new 15-year high of 3.495% and is up +4.8 bp to 3.492%. The 10-year UK gilt yield rose to a 19-year high of 5.362% and is up +9.7 bp to 5.358%.
The ECB, as expected, raised the deposit facility rate by 25 bp to 2.50% and said inflation will stay above 2% for an "extended period."
The ECB raised its 2026 Eurozone GDP forecast to +0.9% from a prior forecast of +0.8%, and kept its 2026 inflation ex-food and energy forecast unchanged at 2.5%.
Markets are discounting a 77% chance of a +25 bp ECB rate hike at the ECB’s next meeting on October 29.
US Stock Movers
Chipmakers and AI-infrastructure stocks are sliding today, pressuring the broader market. CoreWeave (CRWV), Intel (INTC), and Lam Research (LRCX) are down more than -4%, and Micron Technology (MU), SanDisk (SNDK), and Western Digital (WDC) are down more than -3%. Also, ARM Holdings (ARM), Advanced Micro Devices (AMD), and Applied Materials (AMAT) are down more than -2%, and Nvidia(NVDA) is down more than 2% to lead losers in the Dow Jones Industrials.
Copper-producing stocks are falling today, with copper prices down more than -4% after Reuters reported that the White House has not yet made a decision on refined copper tariffs as it weighs concerns of higher prices raising manufacturing costs against the potential benefits of encouraging more domestic mining. Freeport-McMoRan (FCX) is down more than -7%, and Southern Copper (SCCO) is down more than -6%. Also, Rio Tinto Plc (RIO) is down more than -4%, and Newmont Corp (NEM) is down more than -2%.
Home builders and suppliers are retreating today after the 10-year T-note yield jumped to a 2.75-year high, pushing up mortgage rates and weighing on housing demand. Lennar (LEN) is down more than -4%, and DR Horton (DHI), Pulte Group (PHM), KB Home (KBH), and Builders Firstsource (BLDR) are down more than -3%. Also, Toll Brothers (TOL) is down more than -2%.
AeroVironment (AVAV) is up more than +10% to lead drone makers higher after reporting Q1 revenue of $480.5 million, stronger than the consensus of $455.8 million. Also, Red Cat Holdings (RCAT) is up more than +3%, and Defiance Drone and Modern Warfare ETF (JEDI), Aevex Corp (AVEX), Unusual Machines (UMAC), and Kratos Defense & Security Solutions (KTOS) are up more than +2%.
Cybersecurity stocks are climbing today, a supportive factor for stocks. Fortinet (FTNT) and Okta (OKTA) are up more than +2%, and CrowdStrike Holdings (CRWD), Palo Alto Networks (PANW), and SentinelOne (S) are up more than +1%.
American Eagle Outfitters (AEO) is down more than -14% after reporting Q2 comparable sales rose +6.00%, weaker than the consensus of +6.47%.
Cooper Cos (COO) is down more than -13% to lead losers in the S&P 500 after reporting Q3 net sales of $1.07 billion, below the consensus of $1.10 billion, and cutting its full-year revenue forecast to $4.23 billion to $4.25 billion from a previous forecast of $4.29 billion to $4.32 billion, weaker than the consensus of $4.31 billion.
Driven Brands Holdings (DRVN) is down more than -3% after Bank of America Global Research double-downgraded the stock to underperform from buy with a price target of $12.
Kymera Therapeutics (KYMR) is up more than +1% after Wolfe Research upgraded the stock to outperform from peer perform with a price target of $180.
Earnings Reports (9/10/2026)
Adobe Inc (ADBE), Copart Inc (CPRT), Macy's Inc (M), Oracle Corp (ORCL).
On the date of publication, Rich Asplund did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. For more information please view the Barchart Disclosure Policy here.

Stocks Retreat as 10-year T-note Yield Reaches New 2.75-year High

Lam Research Corporation LRCX has delivered an exceptional run over the past year, with its stock nearly tripling as strong AI-related semiconductor demand drives spending on chipmaking equipment.
LRCX has surged 192.8% over the past 12 months, easily outpacing the Zacks Electronics - Semiconductor industry’s 35.3% growth. The stock has also outperformed major industry peers, including Applied Materials, Inc. AMAT, Amkor Technology, Inc. AMKR and Broadcom Inc. AVGO, which have gained 180.6%, 92.4% and 3.6%, respectively, during the same period.
Lam Research One-Year Price Return performance
Such a massive rally naturally raises an important question: Can Lam Research stock continue to move higher after such a strong run?
LRCX still has upside potential. The stock is more expensive than it was a year ago, but its earnings outlook, exposure to AI infrastructure and strong position in advanced semiconductor manufacturing provide enough support for further gains.
AI Chip Demand Keeps Lam Research on a Strong Growth Path
Lam Research is an important part of the semiconductor supply chain ecosystem. The company supplies advanced equipment used by leading chipmakers, including Taiwan Semiconductor Manufacturing and Samsung, to manufacture sophisticated semiconductors.
This puts LRCX in a favorable position as AI chip production expands. The development of increasingly powerful AI processors is driving demand for advanced packaging, high-bandwidth memory (HBM) and more complex chip designs. These technologies require advanced etch and deposition equipment, areas in which Lam Research has significant expertise.
The company is also investing in new technologies to strengthen its competitive position. Its ALTUS ALD system is designed to improve manufacturing efficiency through molybdenum-based deposition, while the Aether platform helps chipmakers produce smaller and denser chip structures.
Lam Research expects advanced packaging revenues to grow more than 70% in 2026 after strong growth in 2025. Emerging technologies such as backside power distribution and dry-resist processing could provide additional growth opportunities as chip designs become more complex.
The strength of customer demand is already visible in Lam Research's results. The company has generated more than $5 billion in revenues for five consecutive quarters, including a record $6.72 billion in the latest reported financial results for the fourth quarter of fiscal 2026. The top-line performance consistency is important. It suggests that LRCX's growth is being supported by actual semiconductor investment rather than simply by excitement around AI.
Strong Earnings and Margin Gains Strengthen LRCX’s Bull Case
Lam Research's latest financial results provide another reason to remain bullish. The company’s fourth-quarter fiscal 2026 revenues increased 30% year over year to $6.72 billion, beating the Zacks Consensus Estimate by 0.7%. Non-GAAP earnings jumped 37% to $1.82 per share, exceeding the consensus estimate by 7.7%.
Lam Research Corporation Price, Consensus and EPS Surprise
Even more encouraging was the improvement in profitability. Non-GAAP gross margin increased 170 basis points year over year to 35% in the fourth quarter. Better pricing, operating efficiencies, scale benefits and a favorable product mix helped drive the improvement.
Non-GAAP operating margin was even stronger, rising 400 basis points to 38.4%. Higher gross margins, an expanded manufacturing footprint in Asia and disciplined cost management all contributed to the gain. This shows the company is not only witnessing growth in revenues but also converting that growth into stronger earnings and better margins.
Wall Street also expects the momentum to continue. The Zacks Consensus Estimate projects fiscal 2027 and 2028 revenues to increase 48.4% and 17.3%, respectively. Earnings per share are expected to grow 60.6% in fiscal 2027 and another 21.6% in fiscal 2028, highlighting the company's attractive long-term earnings potential.
Lam Research's Premium Valuation Looks Justifiable
LRCX does trade at a premium. It currently carries a Value Score of D, reflecting its expensive valuation.
Based on forward 12-month earnings, LRCX trades at 31.72X, significantly above the industry average of 13.64X. While that premium may appear expensive at first, it reflects the company's strong earnings outlook, AI-driven growth opportunities and consistent execution.
Lam Research Forward 12-Month P/E Ratio
Image Source: Zacks Investment Research
It also trades above industry peers, including Amkor Technology, Broadcom and Applied Materials. Amkor Technology, Broadcom and Applied Materials currently trade at forward 12-month P/E multiples of 17.83, 19.91 and 26.22, respectively.
Conclusion: LRCX Stock Is Still Worth Buying
Lam Research's nearly 193% gain over the past year makes the stock look expensive. However, the strong rally does not automatically mean that LRCX has run out of upside.
The company remains deeply tied to some of the strongest trends in semiconductors, including AI chips, HBM and advanced packaging. These trends are translating into record revenues, stronger margins and rapid earnings growth.
So, Lam Research stock is still worth buying despite nearly tripling over the past year.
LRCX currently carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
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Lam Research Nearly Triples in a Year: Is the Stock Still Worth Buying?

For Immediate Release
Chicago, IL – September 4, 2026 – Stocks in this week’s article are Fortinet FTNT, Brinker International EAT, Lincoln Electric LECO and Lam Research LRCX.
4 GARP Stocks Investors Can Scoop Up for Maximum Returns
If you are looking for a profitable portfolio of stocks offering the best of value and growth investing, you can try the growth at a reasonable price or GARP strategy.
The strategy helps investors gain exposure to undervalued stocks with impressive prospects. Unlike a blend strategy, a portfolio that uses GARP investing is expected to include stocks that offer the best of value and growth investing. Fortinet, Brinker International, Lincoln Electric and Lam Research are some GARP stocks that hold promise.
GARP Metrics: Mix of Growth & Value Metrics
The GARP strategy seeks to offer an ideal investment by utilizing the best features of value and growth investing. Investors adopting the GARP approach prefer buying stocks priced below the market or any reasonable target determined by fundamental analysis. These stocks also have solid prospects in terms of cash flow, revenues, earnings per share (EPS) and so on.
Growth Metrics
A strong earnings growth history and impressive earnings prospects are the main concepts that GARP investors borrow from the growth investing strategy. However, instead of super-normal growth rates, pursuing stocks with a more stable and reasonable growth rate is a tactic of GARP investors. Hence, growth rates between 10% and 20% are considered ideal under the GARP strategy.
Another metric that growth and GARP investors consider is return on equity (ROE). GARP investors look for a strong and higher ROE than the industry average to identify superior stocks. Stocks with positive cash flows find precedence under the GARP plan.
Value Metrics
GARP investing prioritizes popular value metrics, the price-to-earnings (P/E) and price-to-book (P/B) ratios. Though this investing style picks stocks with higher P/E ratios than value investors, it avoids companies with extremely high P/E ratios.
Using the GARP principle, we ran a screen to identify stocks that should offer solid returns in the near term.
Here are four stocks from the 12 that made it through the screening process.
Fortinet's investment case rests on a broadening product portfolio and accelerating strategic momentum. The company raised its full-year 2026 revenue growth guidance to 19%, with full-year billings guided between $9.35 billion and $9.55 billion. The July 2026 launch of the FortiGate 1200G with FortiSASE Outpost introduces a convergent SASE Firewall architecture, a newly defined market opportunity addressing hybrid deployment demands.
Concurrently, the expanded FortiEndpoint platform consolidates AI visibility, data security, and endpoint protection into a single agent and license, deepening wallet share per customer. In August 2026, Fortinet acquired Virtue AI to enhance its Security Fabric with agentic AI runtime protection, directly addressing the fast-growing AI security segment. Fortinet Federal's CMMC Level 2 certification opens the U.S. government market.
The Zacks Consensus Estimate for FTNT's 2026 earnings has moved north by 8.3% to $3.40 per share in the past 60 days. This Zacks Rank #1 company surpassed the Zacks Consensus Estimate in all four trailing quarters, the average surprise being 20.34%.
Brinker International enters fiscal 2027 with a clear growth runway, underpinned by company-issued guidance targeting revenues of $6.15 billion to $6.27 billion and adjusted EPS of $12.60 to $13.40. Chili's brand momentum visibly accelerated in July 2026, powered by the sustained success of the Big Crispy chicken sandwich.
On July 16, the company redeemed $350 million in 8.25% notes, lowering its interest expense profile. Its board then expanded the share repurchase authorization to $750 million in August, reflecting management's confidence in free cash flow generation. A 60-to-80 restaurant reimage plan, mid-single-digit same-store sales guidance, and expected positive traffic at Chili's further support the outlook. An Investor Day set for Sept. 17, 2026 could serve as an additional near-term catalyst.
The Zacks Consensus Estimate for EAT's fiscal 2027 earnings has moved north by 4.8% to $13.01 per share in the past 60 days. This Zacks Rank #2 company surpassed the Zacks Consensus Estimate in all the trailing four quarters, the average surprise being 6.21%.
Lincoln Electric is well-positioned for near-term outperformance, driven by converging demand and strategic catalysts. The company's RISE framework targets revenues exceeding $6 billion by 2030, peak adjusted operating margins above 20%, and mid-teens EPS CAGR. For the second half of 2026, management anticipates continued margin improvement, with mid-20% incremental operating margins and a neutral price-cost environment.
Improved demand and capital spending across the Americas and Asia Pacific are broadening the growth base. The July 2026 declaration by the board of a 79 cents per share quarterly dividend reinforces steady shareholder returns, while the company's scheduled September 2026 investor engagements signal management's confidence in execution. With 71 manufacturing facilities across 20 countries and proprietary automation capabilities, Lincoln Electric's infrastructure supports durable earnings growth.
The consensus estimate for LECO's 2026 earnings has moved north by 3% to $11.16 per share in the past 60 days. This Zacks Rank #2 company surpassed the Zacks Consensus Estimate in the trailing four quarters, the average surprise being 3.92%.
AI-driven semiconductor demand is structurally reshaping Lam Research's near-term growth outlook. The company's guidance for the September 2026 quarter projects revenues of $8.10 billion and a non-GAAP operating margin of 39.5%, reflecting strong sequential momentum. Deferred revenues of $2.43 billion at June quarter-end signal a healthy forward demand pipeline supporting continued execution.
In August 2026, Lam Research announced plans to invest more than $3 billion over the next five years to expand its global R&D lab network, with experiment capacity targeted to grow by over 50%. Groundbreaking of a new 120,000-square-foot Oregon facility marks the investment's first concrete milestone. A 27% quarterly dividend hike to $0.33 per share further signals management's confidence in sustained cash generation and long-term shareholder returns.
The consensus estimate for LRCX's 2026 earnings has moved north by 18.7% to $9.33 per share in the past 30 days. This Zacks Rank #2 company surpassed the Zacks Consensus Estimate in each of the trailing four quarters, the average surprise being 7.12%.
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Zacks.com featured highlights include Fortinet, Brinker International, Lincoln Electric and Lam Research

Applied Materials AMAT shares have climbed 72.5% year to date (YTD), outperforming the Zacks Computer and Technology sector and the Zacks Electronics - Semiconductors industry’s appreciation of 16.8% and 26.1%, respectively.
AMAT YTD Performance Chart
The rise in stock price has made AMAT stock trade at a premium. Currently, AMAT has a price-to-sales (P/S) multiple of 8.04X, which is much above the industry’s P/S of 4.96X. AMAT’s value score of D also suggests its overvaluation.
AMAT Forward 12-Month (P/S) Valuation Chart
Given the rise in share price and valuation combination, investors might ask: Should they buy, sell or hold the stock? Let’s discuss the fundamentals in detail.
AI and Capacity Expansion Trends Strengthen AMAT’s Growth
Applied Materials is well positioned to capitalize on AI-driven semiconductor demand as leading-edge foundry-logic, DRAM and advanced packaging are expected to account for around 80% of wafer fab equipment growth in 2026 and 2027. AMAT’s leadership in these areas, particularly HBM and 3D chiplet stacking, strengthens its exposure to rising AI computing requirements and fab capacity investments globally.
AMAT introduced six new chipmaking systems in the latest quarter, spanning DRAM and advanced packaging. Enhanced Centura Prime Epi targets faster, more power-efficient DRAM and HBM, while Producer Avila 2 supports higher-layer-count HBM. AMAT also introduced Opta Quad CMP, Nokota VMax 2 ECD, and new eBeam systems addressing demanding packaging, plating, metrology and defect-analysis requirements for advanced architectures and yield optimization across fabs.
As the opportunity broadens beyond equipment sales, chipmakers race to increase output and yield, benefiting wafer fabrication equipment manufacturers like AMAT. Applied Materials expects advanced packaging revenues to grow more than 70% in calendar 2026, while DRAM revenues, including HBM packaging, rose 52% year over year in the fiscal third quarter. Process diagnostics and control revenues are also expected to increase more than 50% this year overall through 2026.
Furthermore, Applied Global Services (AGS) adds an important recurring growth engine. AGS generated record third-quarter revenues of $1.78 billion, up 22% year over year, with gross margin reaching 35.6% and operating margin at 30.1%. Since more than 37,000 chambers are connected to AIx software, supporting AI-powered monitoring, diagnostics and predictive analytics, AGS is expected to grow above 20% in 2026 further and improve profitability.
Strong customer visibility further supports AMAT’s growth outlook. Most leading-edge logic and DRAM fabs are operating at full capacity, customers announced more than 10 new fab projects during the third quarter of fiscal 2026, and some forecasts extend to 2030. AMAT plans to double quarterly system output by 2028. Applied Materials’ fiscal fourth-quarter revenue guidance of $10.25 billion also signals accelerating momentum into 2027.
AMAT’s Broad Portfolio Helps it Challenge its Competitors
AMAT’s broad portfolio positions the company to capture a larger share of customer spending as semiconductor manufacturing becomes increasingly materials-intensive while also keeping its competitors like KLA Corporation KLAC, Lam Research LRCX and Camtek CAMT at bay. The breadth of Applied Materials' portfolio also reduces its dependence on any single semiconductor technology cycle and supports stronger pricing power.
KLA Corporation remains a dominant player in process control, wafer inspection and yield management solutions, while Camtek focuses on semiconductor inspection, metrology, advanced packaging and high-performance computing applications. Lam Research competes with Applied Materials across deposition and etch technologies, including advanced atomic layer deposition systems used in leading-edge semiconductor manufacturing.
All of these companies operate based on large capital expenditures. AMAT is particularly seeing strong customer visibility. Based on longer-term customer demand signals, the company opened its newest manufacturing center in Singapore during the quarter. AMAT is hiring and training manufacturing and customer-support personnel with the objective of doubling quarterly system output from current levels by 2028.
Continuous competitive environments require continued execution because customers can standardize around fewer toolsets or negotiate across broad equipment purchases. The competitive environment also pressures margin, but AMAT’s value-based pricing has supported its bottom line. For the fourth quarter of fiscal 2026, Applied Materials expects non-GAAP earnings of $4.02 per share (+/- 20 cents), indicating 85% year-over-year growth at the midpoint. The Zacks Consensus Estimate reflects year-over-year growth of 86.6%. The estimates have been revised upward in the past 30 days.
Conclusion: Buy AMAT Stock Now
AMAT’s broad portfolio, rising AI-driven WFE demand, expanding semiconductor equipment business and investments in manufacturing capacity support further growth. Therefore, investors should consider buying AMAT stock for long-term growth potential. Given these factors, we suggest investors accumulate this Zacks Rank #2 (Buy) stock at present. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Research Chief Names "Single Best Pick to Double"
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Should You Buy, Sell or Hold AMAT Stock After a 72.5% YTD Rise?

Key Points
Lam Research sells semiconductor manufacturing equipment, and it gets a nice portion of its revenue from the memory industry.
Lam's guidance suggests that its growth rate is poised to accelerate in the current fiscal year.
The growing demand for memory equipment should help Lam sustain its healthy growth rate over the long run.
Memory demand has been outstripping supply due to the strong consumption of dynamic random-access memory (DRAM) and NAND flash storage chips by artificial intelligence (AI) data centers.
The memory crunch has been so acute that prices have climbed by a whopping 500% in just one year, as reported by Tom's Hardware. Importantly, the memory shortage won't be easing any time soon. Deloitte estimates that DRAM prices could jump 4x in 2026 despite efforts by memory manufacturers to bring additional supply online.
Missed Nvidia in 2009? This Rare Signal Is Flashing Again. In 2009, a "Double Down" signal flashed for a little-known chipmaker called Nvidia. For the first time in years, that same "Total Conviction" signal is flashing for a company 1/100th the size of Nvidia. Continue »
The favorable demand-supply dynamics have fueled outstanding growth in the revenue and earnings of Micron Technology and Sandisk. The good news for Sandisk and Micron stock investors is that the supply crunch may not ease until 2029 or 2030, according to Deloitte. This could pave the way for more upside in both stocks.
However, we are going to take a closer look at the prospects of Lam Research (NASDAQ:LRCX), a company that can win big from the memory supply crunch. Let's look at the reasons why this semiconductor stock will be a major beneficiary of the memory boom.
Image source: Getty Images.
Lam Research is a key player in the memory ecosystem
Deloitte estimates that the combined capital expenditure of memory manufacturers could jump from $58 billion in 2025 to $97 billion this year. That figure could increase to $146 billion in 2027. Meanwhile, the overall semiconductor industry's capex could hit $198 billion this year, followed by $260 billion in 2027.
These numbers bode well for Lam Research, as it sells semiconductor manufacturing equipment used by memory manufacturers, foundries, and integrated device manufacturers. The company gets 46% of its revenue from sales of memory equipment. This puts Lam Research right in the middle of the global memory boom.
Not surprisingly, Lam's revenue and earnings have been growing at a nice clip.
Lam reported a 26% increase in revenue in the recently concluded fiscal 2026 to $23.2 billion. Its earnings per share jumped by an even more impressive 39% to $5.76. The good news for Lam investors is that the company anticipates a solid uptick in growth rate this year. It projects a 52% year-over-year increase in revenue in the current quarter to $8.1 billion. Meanwhile, earnings per share are expected to soar by 71% from the year-ago quarter to $2.15.
So, it is easy to see why analysts are now expecting Lam Research to clock robust earnings growth over the long run.
Don't be surprised to see that estimate move higher in the future. Deloitte notes that the new memory supply won't be coming online until 2029 or 2030, as building new memory manufacturing plants takes time. So, the ongoing supply crunch could worsen by then, creating demand for more equipment over the long run.
As such, Lam Research's healthy growth trajectory can continue over the long run.
Investors have a great opportunity to buy Lam stock on the dip now
Lam Research stock has jumped 76% in 2026, as of this writing. However, it has slipped 30% from the 52-week high it reached on June 30. So, savvy investors have a nice opportunity to buy this AI stock before it steps on the gas again, especially considering its improving earnings growth prospects.
Analysts predict a 62% jump in Lam's earnings per share in fiscal 2027 to $9.46. The forecast for the next couple of years suggests a nice bump in its bottom line.
However, Lam's growth could be much better than Wall Street anticipates, given that the memory crunch appears larger than expected. Memory manufacturers are likely to continue investing in equipment until the end of the decade to fill the supply gap. This could set Lam up for a bigger increase in earnings.
Assuming Lam's bottom line grows at an annual rate of 27% in the long run (based on the chart seen in the previous section), its earnings per share could increase to $19.38 per share after four years (using fiscal 2027's projected earnings of $9.46 per share as the base). If Lam stock trades at even 30 times earnings at that time (a discount to the tech-focused Nasdaq-100 index's earnings multiple of 34), its stock price could reach $581 in four years.
That's a potential 93% jump from current levels, which is why investors should consider buying Lam on the dip, as it could regain its mojo and soar higher.
Should you buy stock in Lam Research right now?
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The Memory Crunch Is Bigger Than Expected. 1 Top Stock to Buy on the Dip (Hint: Not Micron or Sandisk)

Palo Alto Networks, Inc. PANW delivered fourth-quarter fiscal 2026 non-GAAP earnings of $1.02 per share, which beat the Zacks Consensus Estimate by 4.1%. The figure improved 7.4% year over year.
Revenues climbed 34% year over year to $3.41 billion and topped the consensus estimate by 1.8%. Broad-based strength across Network & AI Security, Cortex and Idira, along with record platformization adoption, drove the fourth-quarter results. Next-Generation Security ARR jumped 63% to $9.10 billion.
PANW's Revenue Mix Shows Broad-Based Growth
Product revenues increased 28.6% year over year to $738 million from $574 million in the year-ago quarter, accounting for 21.6% of total revenues. Subscription and support revenues rose 36.2% to $2.672 billion from $1.962 billion, which represented 78.4% of total revenues.
By platform, fourth-quarter revenues were $2.331 billion for Network & AI Security, $586 million for Cortex and $336 million for Idira. Other revenues, including Unit 42, professional services and financing income, totaled $157 million.
Palo Alto Networks, Inc. Price, Consensus and EPS Surprise
Palo Alto Networks' Platformization Hits Record Levels
Remaining performance obligations rose 34% year over year to $21.2 billion. Net new NGS ARR reached approximately $970 million, up 98% year over year, reflecting the strongest quarterly addition reported by the company.
Palo Alto Networks added roughly 220 net new platformizations in the quarter, up 44% year over year. Net retention among platformized customers exceeded 120%, while more than 65% of NGS ARR came from platformized customers.
PANW's AI Security Products Gain Scale
Prisma AIRS reached roughly $120 million in ARR within one year of general availability and had over 800 customers, more than doubling sequentially. Software firewall ARR grew 29% year over year, while SASE competitive displacements totaled about $450 million in fiscal 2026.
Cortex momentum also remained strong. XSIAM ARR exceeded $700 million and grew about 70% year over year, while observability ARR surpassed $500 million and increased more than 2.5 times from the second quarter. CyberArk, now called Idira, generated more than 200 new-logo wins from PANW's installed base.
Palo Alto Networks' Margins Reflect SaaS Mix Shift
Non-GAAP gross profit was $2.552 billion, with gross margin at 74.8%, down from 75.8% a year earlier. Management attributed the pressure to a mix shift toward faster-growing SaaS offerings that have not yet reached gross-margin maturity.
Non-GAAP operating income was $1.011 billion, translating to a 29.6% margin compared with 30.3% a year ago.
Adjusted free cash flow increased to $1.289 billion from $954 million, with margin edging up to 37.8% from 37.6%. Cash and cash equivalents stood at $2.514 billion, with $557 million in short-term investments.
PANW Guides Strong Growth for Fiscal 2027
For the first quarter of fiscal 2027, Palo Alto Networks expects revenues of $3.300-$3.310 billion, indicating 33-34% growth. NGS ARR is projected to be in the range of $9.54-$9.56 billion, RPO in the band of $20.8-$20.9 billion and non-GAAP earnings per share between 96 cents and 98 cents.
For fiscal 2027, revenues are forecast at $14.10-$14.20 billion, implying 23-24% growth. NGS ARR is expected to be in the range of $11.075-$11.175 billion, RPO in the band of $25.2-$25.4 billion and non-GAAP earnings per share between $4.16 and $4.19. The company targets a 29.5% non-GAAP operating margin and a 38.0% adjusted free cash flow margin.
Palo Alto Networks Maps Platform Growth Ahead
Management expects fiscal 2027 Network & AI Security revenues to grow in the low double digits, Cortex revenues to rise about 30%, and Idira revenues to reach approximately $1.5 billion, implying pro forma growth in the high teens to 20%.
The company expects 60-61% of fiscal 2027 net new NGS ARR to arrive in the second half. Its outlook assumes the tail end of a large LLM customer's migration to Chronosphere continues through the first quarter, but contributes less net new ARR than it did in the fourth quarter.
PANW’s Zacks Rank and Other Stocks to Consider
Palo Alto Networks has a Zacks Rank #2 (Buy) at present.
Some other top-ranked stocks worth considering in the broader Zacks Computer and Technology sector are Applied Materials AMAT, Lam Research LRCX and Amphenol APH, each carrying a Zacks Rank #2 at present. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
The Zacks Consensus Estimate for Applied Materials’ fiscal 2026 earnings is pegged at $12.76 per share, up by 3 cents over the past seven days, indicating a year-over-year increase of 35.5%. Applied Materials shares have surged 72.5% year to date (YTD).
The Zacks Consensus Estimate for Lam Research’s fiscal 2027 earnings has moved northward by a penny to $9.33 per share over the past seven days and calls for a year-over-year jump of 60.6%. Lam Research shares have soared 69.8% YTD.
The Zacks Consensus Estimate for Amphenol’s 2026 earnings has remained unchanged at $5.25 per share over the past 30 days, implying a year-over-year increase of 57.2%. Amphenol shares have rallied 20.8% YTD.
Research Chief Names "Single Best Pick to Double"
From thousands of stocks, 5 Zacks experts each have chosen their favorite to skyrocket +100% or more in months to come. From those 5, Director of Research Sheraz Mian hand-picks one to have the most explosive upside of all.
This company targets millennial and Gen Z audiences, generating nearly $1 billion in revenue last quarter alone. A recent pullback makes now an ideal time to jump aboard. Of course, all our elite picks aren’t winners but this one could far surpass earlier Zacks’ Stocks Set to Double like Nano-X Imaging which shot up +129.6% in little more than 9 months.
Free: See Our Top Stock And 4 Runners Up
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This article originally published on Zacks Investment Research (zacks.com).

PANW Q4 Earnings Beat Estimates on Platformization Strength

Artificial Intelligence (AI) is driving one of the biggest data center investment booms the industry has ever seen. Tech companies are spending heavily to build the computing capacity needed to support AI models, applications and services, creating opportunities well beyond the biggest AI names.
The numbers are hard to ignore. PricewaterhouseCoopers expects global data center spending to reach $31.6 trillion through 2050, with the United States accounting for nearly half, at $15.1 trillion. McKinsey expects about $7 trillion in global data center investment by 2030, as cited in Forbes.
Spending is already ramping up. S&P Global estimates that six major hyperscalers— Amazon, Microsoft, Alphabet, Meta, Oracle and SpaceX— are on track to spend a combined $1.3 trillion through 2027.
That spending is creating a broad set of winners across the data center supply chain, from chips and memory to semiconductor equipment. Here are four stocks worth buying as the AI data center boom gathers steam: NVIDIA NVDA, Micron Technology MU, SanDisk Corp. SNDK and Lam Research LRCX.
NVIDIA sits at the center of the AI data center boom as the dominant supplier of specialized chips used to train and run AI models. Its Data Center business has become the company’s main growth engine, with revenues surging 117% year over year and 18% sequentially to $89.02 billion in the second quarter of fiscal 2027.
Demand remains strong as hyperscalers and other AI customers continue to invest heavily in computing capacity. NVIDIA is also benefiting from the rollout of its Blackwell platform, while the next-generation Vera Rubin architecture could provide another leg of growth. The company began production shipments of Vera Rubin in August and expects the platform to account for about 20% of Data Center revenues in the third quarter.
The spending opportunity is significant. NVIDIA expects capital expenditures from the top five hyperscalers to reach nearly $800 billion in 2026 and $1.3 trillion in 2027. That kind of expectations from the market leader tends to set the tone for the whole sector.
Beyond its chips, NVIDIA’s software ecosystem strengthens its competitive moat and makes switching platforms difficult. As long as AI infrastructure spending stays strong, NVIDIA remains one of the biggest direct beneficiaries.
The stock currently sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
The Zacks Consensus Estimate for NVIDIA’s current and next fiscal year’s EPS implies a year-over-year growth of 93% and 64%, respectively.
NVIDIA Corporation Price, Consensus and EPS Surprise
Micron offers a different way to play the AI data center boom. While NVIDIA supplies the computing power, Micron provides the high-bandwidth memory (HBM) needed to keep those AI systems running efficiently. AI workloads are extremely memory-intensive, making HBM an increasingly critical part of the infrastructure.
That demand is translating into strong growth for Micron. Fiscal third-quarter 2026 revenues jumped to $41.46 billion from $23.86 billion in the previous quarter and $9.3 billion a year earlier. The company expects revenue to rise further to about $50 billion in the fiscal fourth quarter, while projecting a gross margin of roughly 86%, supported by strong AI memory demand and favorable pricing.
The memory market also benefits from tight supply, as adding new fabrication capacity takes years. Management expects supply growth to remain short of demand, supporting pricing durability.
Importantly, memory demand should remain strong regardless of which AI accelerator ultimately wins, and that's good for Micron. For now, tight supply and surging HBM demand are working firmly in Micron’s favor.
The stock currently carries a Zacks Rank #2 (Buy). The Zacks Consensus Estimate for MU’s current and next fiscal year’s EPS implies a year-over-year growth of 791% and 114%, respectively.
Micron Technology, Inc. Price, Consensus and EPS Surprise
Sandisk gives investors another way to benefit from the AI data center buildout, this time through storage. AI systems rely on massive amounts of data, creating strong demand for the flash memory used to store it. Like Micron, Sandisk is benefiting from tight memory supplies and higher prices.
The impact is already showing up in its results. Fiscal fourth-quarter 2026 revenues jumped 372% year over year and 51% sequentially to $8.97 billion, with roughly two-thirds of the sequential increase coming from higher pricing and the rest from higher volumes.
Data centers have quickly become Sandisk’s biggest growth driver. Fiscal 2026 Data Center revenues surged 437% to $5.15 billion, while the segment’s share of the company’s bits increased from about 12% a year earlier to 38%.
The near-term outlook remains strong. Sandisk expects fiscal first-quarter 2027 revenues of $10.3 billion to $10.8 billion and non-GAAP gross margin of 83%-85%. More importantly, the company expects demand to continue exceeding supply, with bits remaining on allocation beyond 2027.
The stock currently sports a Zacks Rank #1. The Zacks Consensus Estimate for Sandisk’s current and next fiscal year’s EPS implies a year-over-year growth of 201% and 19%, respectively.
Sandisk Corporation Price, Consensus and EPS Surprise
Lam Research
Lam Research offers a different way to play the AI data center boom. Rather than making chips, it supplies the equipment needed to manufacture them, particularly etch and deposition tools used in advanced semiconductor production.
That gives Lam Research broader exposure to the AI buildout. Whether demand goes toward GPUs, memory or advanced logic chips, semiconductor manufacturers need equipment to expand and upgrade production capacity. AI is also driving investment in NAND, DRAM, HBM, gate-all-around transistors and advanced packaging, all of which require increasingly complex manufacturing processes.
The growth is already visible in Lam Research’s results. Fiscal fourth-quarter 2026 revenues rose 30% year over year and 15% sequentially to $6.72 billion, reflecting strong demand for semiconductor manufacturing equipment.
LRCX’s fortunes are still tied to the same underlying capex cycle as the other three names. However, its position further up the supply chain provides a more diversified way to benefit from AI infrastructure spending. As chipmakers race to expand capacity, Lam Research stands to benefit from the equipment needed to make that expansion possible.
The stock currently carries a Zacks Rank #2. The Zacks Consensus Estimate for Lam Research’s current and next fiscal year’s EPS implies a year-over-year growth of 61% and 22%, respectively.
Lam Research Corporation Price, Consensus and EPS Surprise
Research Chief Names "Single Best Pick to Double"
From thousands of stocks, 5 Zacks experts each have chosen their favorite to skyrocket +100% or more in months to come. From those 5, Director of Research Sheraz Mian hand-picks one to have the most explosive upside of all.
This company targets millennial and Gen Z audiences, generating nearly $1 billion in revenue last quarter alone. A recent pullback makes now an ideal time to jump aboard. Of course, all our elite picks aren’t winners but this one could far surpass earlier Zacks’ Stocks Set to Double like Nano-X Imaging which shot up +129.6% in little more than 9 months.
Free: See Our Top Stock And 4 Runners Up
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This article originally published on Zacks Investment Research (zacks.com).

4 Stocks to Buy Now to Ride the AI Data Center Spending Boom

Key Points
Lam's historical September-to-January seasonal performance has outpaced the S&P 500 by 7.46% on average, beating the S&P 500 in 17 of the past 20 periods.
Strong demand for NAND, high bandwidth memory, and AI-related chipmaking equipment is driving a major upswing in Lam's growth outlook.
Record fiscal 2026 results, a 52% gross margin, and higher long-term profitability targets give the stock fundamental momentum beyond its seasonal pattern.
If I had to choose one semiconductor stock to buy going into September, Lam Research (NASDAQ: LRCX) would be near the top of my list. Its seasonal track record is worth paying attention to, but the bigger story is what's happening across the business right now. Demand for chipmaking equipment remains strong, AI investment continues to drive spending, and several of Lam Research's growth areas are starting to come together at the same time.
Data over the past 20 years shows that a buy date of Sept. 9 and a sell date of Jan. 10 produced a geometric average return of 7.46% above the S&P 500. That strategy beat the benchmark index in 17 of 20 periods.
Missed Nvidia in 2009? This Rare Signal Is Flashing Again. In 2009, a "Double Down" signal flashed for a little-known chipmaker called Nvidia. For the first time in years, that same "Total Conviction" signal is flashing for a company 1/100th the size of Nvidia. Continue »
Seventeen out of 20 is a strong hit rate, and it aligns with the broader semiconductor pattern, where a Sept. 22 entry has beaten the index by 5.39% annually over the same span. The market as a whole averages a 0.7% loss in September, with gains only 46% of the time.
Why does this pattern exist?
The seasonal window tracks capital equipment budgeting. Chipmakers finalize their spending plans in the back half of the year, and orders placed during that period convert into revenue over the following quarters. Lam's business responds before the chips those tools produce ever ship.
That cycle is running hot right now. Lam raised its 2026 wafer fab equipment outlook to the low-$150 billion range, up from a prior view of $140 billion. Guidance for the quarter that ends in September calls for $8.1 billion in revenue, which would be roughly 20% sequential growth.
What the company does
Think of a chip as a skyscraper built one floor at a time. Lam sells the machines that lay down each layer of material and then carve patterns into it. No chips can be manufactured without that step, which is why Lam benefits from all aspects of the AI data center build-out, whether the chip designs come from Nvidia, Broadcom, or a company nobody has heard of yet.
Three parts of the business are working simultaneously right now. The first is NAND flash, and it caught almost everyone off guard. Lam's revenue from that segment more than doubled from the prior quarter as memory-chip makers rushed to upgrade older factories for the enterprise drives that AI data centers keep buying. Here is the part that makes this more than a one-time bump. As NAND chips go from 128 layers to 500 and beyond, manufacturing them gets harder, and Lam's opportunity per wafer doubles along the way. Management believes this upgrade wave will add more than $40 billion in customer spending over the next several years.
The second is high bandwidth memory, the specialized chips that sit next to all AI accelerators and feed them data. Building HBM means stacking memory dies on top of each other and drilling tiny vertical connections through the silicon so the layers can talk. Lam is a leading provider of equipment for that step. Every HBM stack in every AI system passes through it, so the company gets paid on volume; it does not have to compete chip by chip.
The third piece is the one I find most interesting, because it changes what Lam's customers can do rather than just how much they can make. Its Aether process replaces the old method of spinning liquid chemicals onto a wafer with a dry process done in a vacuum. The result absorbs 3 to 5 times more EUV light and cuts the amount of chemical raw materials being used by 80% to 90%. One of the largest memory makers picked it as the production tool of record for its most advanced DRAM. Akara, Lam's newer etch platform, swaps in a solid-state plasma source that reacts to process changes more than 100 times faster than what came before, which matters when you are cutting features whose sizes are measured in atoms.
None of this shows up in a headline the way a new GPU does. But Lam's equipment is a key layer underneath chip technology, and it gets bought first.
The financial backdrop
The company closed its fiscal 2026 in June with record revenue of $23.2 billion and diluted earnings per share (EPS) of $5.82, up 41%. Gross margin for the quarter that ended in June hit 52%, the company's highest in 20 years, on pricing actions and favorable mix.
Management then raised its long-term targets by 500 to 1,000 basis points compared to the figures it provided during its 2025 investor day. It's now guiding for a gross margin in the mid-50% range and an operating margin in the mid-40% range. So, all in all, if the seasonal pattern holds again this year, Lam could be one of the more compelling chip stocks to own heading into the fall, especially with its underlying business momentum giving investors more than just history to lean on.
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Micah Zimmerman has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Broadcom, Lam Research, and Nvidia. The Motley Fool has a disclosure policy.

Lam Research Corporation

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