Lam Research shares tumbled 10.01% to $234.69 in Thursday trading, extending a slide that began after Wednesday's after-hours earnings release, when the stock first fell about 7%. The chip-equipment maker posted record fiscal first-quarter results, but a forecast for the December quarter that offered limited upside to Wall Street's targets overshadowed the headline beat.
Lam Research reported adjusted earnings of $2.20 per share, topping the $2.18 estimate and marking a 74.6% jump from $1.26 a year earlier. Revenue came in at $8.22 billion, up 54.4% year over year and ahead of the $8.153 billion analysts had penciled in. For the current quarter, the company guided to adjusted earnings of $2.18 to $2.48 per share on sales of $8.200 billion to $9.000 billion, versus consensus estimates of $2.31 and $8.533 billion. Executives pointed to supply chain constraints as the reason sales growth couldn't run faster, even as demand tied to artificial intelligence and advanced memory remained strong. China's share of revenue, which reached 35% in September, is expected to fall substantially in December.
Analysts largely kept their ratings intact while trimming price targets to reflect the muted near-term outlook. Needham's Charles Shi maintained a Buy but cut his target to $290 from $390, while Mizuho's Vijay Rakesh kept an Outperform rating and lowered his target to $360 from $365. Evercore ISI's Mark Lipacis also held an Outperform stance with a reduced $315 target. Cantor stood out by keeping a $500 target and calling the stock a "Top Pick," pointing to more than $200 billion in expected chip-tool demand.
The pullback has now erased 9.10% of the stock's value over the past five trading days and 17.42% over the past 30, a sharp reversal for a name that traded as high as $438.50 over the past 52 weeks. On the company's earnings call, management pointed to wafer fabrication equipment spending topping $200 billion in 2027 as the longer-term case for the business, leaving investors to weigh whether supply constraints prove temporary or a persistent drag on how quickly that demand converts into revenue.