Lam Research pullback highlights opportunity in chip equipment market

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Lam Research chip market pullback

Highlights

Lam Research reported record June-quarter revenue of $6.72 billion, up 30% year over year, with September-quarter revenue projected at $8.1 billion.
Revenue linked to NAND memory more than doubled quarter over quarter, while advanced chip packaging business is expected to grow over 70% in 2026.
Shares have dropped 37% from a 52-week high of $438.50 to about $275, but services revenue surged over 40% year over year in Q2, cushioning overall performance.

Revenue growth and equipment demand outlook

As reported by CNBC, Lam Research is benefiting from rising investment in advanced semiconductors as technology companies spend heavily on AI infrastructure. The company supplies etching and deposition equipment used to build increasingly complex chips, positioning it within a critical part of the semiconductor manufacturing chain.

Lam reported record June-quarter revenue of $6.72 billion, up 30% from a year earlier. Revenue linked to NAND memory, which is used for data storage, more than doubled from the previous quarter, and management projected September-quarter revenue of $8.1 billion.

The company also expects its advanced chip packaging business to grow more than 70% in 2026. As manufacturers pursue more powerful and efficient chips, demand for specialized tools that carve intricate patterns and add ultra-thin layers is increasing, supporting the case for further growth in Lam’s core business.

Volatility, services cushion and investor focus

Lam’s shares have fallen roughly 37% from their 52-week high of $438.50 to around $275, a drop that reflects profit-taking after a strong run earlier this year. The move leaves the stock exposed to continued volatility, particularly ahead of its earnings report due on Oct. 21.

At the same time, Lam’s services and upgrades business is providing a steadier source of revenue beyond new equipment sales. Revenue from its Customer Support Business Group rose more than 40% year over year in the second quarter, giving the company an additional buffer if AI-related spending slows.

Lam has beaten earnings estimates for 12 consecutive quarters, and its position across memory, advanced packaging and chip fabrication equipment keeps it closely tied to broader semiconductor capital spending. That combination suggests the company remains leveraged to long-term industry expansion, even as near-term trading remains unsettled.

In our earlier report on the AI-linked tech selloff driven by interest-rate fears, we explained how hotter-than-expected inflation data pushed investors to reassess the cost of financing large-scale AI infrastructure. We also noted that the risk-off move hit major chip and cloud-related names as markets priced in higher odds of further Federal Reserve tightening.

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