Lam Research anticipates its advanced packaging business to grow by over 40% in 2026, benefiting from increasing demand for HBM3E and HBM4 and complex 3D integration designs crucial for AI workloads. The company maintains strong gross margins of approximately 50% while engaging in aggressive capital returns, deploying $1.4 billion towards share repurchases and $328 million in dividends in the December 2025 quarter.
Cyborg Score Rationale
Lam Research is on track to outperform its own 2028 financial targets with robust revenue and EPS growth driven by strong chip demand, guiding for sequential quarterly revenue growth in 2026. Over 75% of analysts maintain a Buy or Strong Buy rating, and institutional ownership is nearing 85%. However, the stock trades at an elevated forward P/E of ~31 for FY27.
Top Insights
Stock is up approximately 179% over the past twelve months, fueled by HBM4 development acceleration and broadening AI into edge computing
2026 expected to be a second-half weighted year with robust growth across DRAM and leading-edge foundry logic, with total WFE projected at $135 billion
87.9% of total revenue is derived from international sales, with China alone accounting for 42.2%, creating significant geopolitical exposure
The company has transformed from a cyclical equipment provider into a structural growth story by dominating critical etching and deposition steps for advanced packaging and HBM4
Named Competitors
Applied Materials — Semiconductor equipment and materials company
ASML — Lithography and semiconductor equipment leader
Teradyne — Semiconductor test and equipment provider
Recent Developments
(February 2026) Stock reached record high of $248.17 in January 2026, followed by healthy consolidation period
(February 2026) Company elevated roles of proven leaders as it enters next phase of growth, with leadership transition effective March 6, 2026
(December 2025) Completed $1.4 billion in share repurchases and $328 million in dividend distribution during quarter
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