Lam Research Corporation · LRCX · FY2026 Q3 · Calendar Q2 2026

Lam Research Q3 FY2026: Record Revenue and EPS Beat on AI-Driven Chip Demand

Lam Research delivered record Q3 FY2026 results with $5.84B revenue and $1.47 EPS, both exceeding guidance and consensus estimates. AI-driven demand for higher-layer NAND, 1C DRAM, and advanced packaging is the primary growth engine, pushing Lam's served available market share to the mid-30% range of a wafer-fab-equipment market now estimated at $140 billion with an upside bias. Gross margin guidance stepped up to 50.5% from the prior quarter's approximately 49%, and the Customer Support Business Group crossed $2 billion in a single quarter for the first time. The stock initially sold off 2.2% on the report but has since drifted plus 16.9%, suggesting the market progressively validated the growth narrative. The central question for investors is whether AI-driven memory and logic capex can sustain this trajectory into 2027, particularly given clean-room constraints and declining…

Reported After market closeNASDAQTechnology $364.68B market cap
100quality score

Earnings scorecard

Reported versus consensus
Reported EPS $1.47 Consensus $1.36
EPS surprise +8.1% Reported versus consensus
Reported revenue $5.84B Consensus $5.75B
Revenue surprise +1.6% Reported versus consensus

Market reaction

event-close to next-session close
Stock move -2.6% Event window
SPY move -0.4% Same window
Abnormal move -2.2% Stock minus SPY
Volume 1.4× Versus trailing sessions
Subsequent drift +16.9% Up to 20 sessions
LRCXSPY benchmark

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Why did LRCX fall 2.6% after beating EPS estimates in FY2026 Q3?What changed in LRCX's guidance and outlook in FY2026 Q3?Give me the bull and bear case for LRCX after FY2026 Q3 earnings.

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Transcript intelligence

What changed

Compared to the prior quarter (FY2026 Q2): Quarterly revenue set a new record at $5.84B, a 24% year-over-year increase, surpassing the top end of prior guidance. Gross margin guidance improved from approximately 49% to 50.5%. The Customer Support Business Group posted its first $2 billion-plus quarter. Advanced packaging growth guidance was raised from over 40% to over 50% for 2026. Lam raised its WFE market estimate to $140 billion with an upside bias. A next-generation Dextro cobot was announced with 10x compute power in a smaller footprint, with the first deposition-product shipment scheduled. Capital returns accelerated, with $800M in buybacks, $750M in debt retirement, and $326M in dividends, totaling 139% of free cash flow returned to shareholders.

Guidance delta

Management maintained June-quarter guidance of $6.6 billion plus or minus $400 million in revenue and 50.5% plus or minus 1 percentage point gross margin. This represents a step up from the prior quarter's March guidance of $5.7 billion plus or minus $300 million and approximately 49% gross margin. Guidance sentiment was maintained, reflecting confidence in continued AI-driven demand. Capex is expected to remain at 4-5% of revenue to fund growth initiatives.

Key takeaways

  • Record Q3 FY2026 revenue of $5.84B and EPS of $1.47, beating consensus estimates of $5.75B and $1.36.
  • June-quarter guidance of $6.6B plus or minus $400M revenue and 50.5% gross margin, up from the prior quarter's $5.7B and approximately 49%.
  • AI-driven demand is accelerating NAND layer-count upgrades and 1C DRAM adoption, expanding Lam's SAM to the mid-30% range of WFE.
  • Customer Support Business Group generated $2.1B, its first $2B-plus quarter, driven by spares, upgrades, and services.
  • WFE market estimate raised to $140B for 2026 with an upside bias.
  • Capital returns totaled 139% of free cash flow: $800M buybacks, $750M debt retirement, $326M dividends.

Management priorities

  • Commissioning a second manufacturing facility in Malaysia in the second half of 2026.
  • Shipping the first next-generation Dextro cobot for deposition tools.
  • Expanding Equipment Intelligence services to additional foundry and memory customers.
  • Increasing R&D spend to support high-aspect-ratio etch, ALD, and advanced packaging tools.
  • Maintaining capex at 4-5% of revenue to fund growth initiatives.

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Earnings History

Estimate Beat Miss Match
LRCX EPS earnings history estimate and actual scatter chart 9 reported fiscal quarters and 3 future estimate-only quarters. Q3 '24 estimate $7.30 Q3 '24 actual $0.78, miss Q4 '24 estimate $0.76 Q4 '24 actual $0.81, beat Q1 '25 estimate $0.81 Q1 '25 actual $0.86, beat Q4 '25 estimate $1.21 Q4 '25 actual $1.33, beat Q1 '26 estimate $1.22 Q1 '26 actual $1.26, beat Q2 '26 estimate $1.17 Q2 '26 actual $1.27, beat Q3 '26 estimate $1.36 Q3 '26 actual $1.47, beat Q4 '26 estimate $1.69 Q4 '26 actual $1.82, beat Q1 '27 estimate $1.83 Q2 '27 estimate $1.99 Q3 '27 estimate $2.48
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Analyst Consensus ?

ConsensusBuy47 ratings
Bullish3880.9%
Neutral817.0%
Bearish12.1%

1 unmapped firm rating excluded from the percentages.

Analyst 52W Price Targets

$239.62Current
$54.3Low
$242.21Average
$575High

Latest persisted target per named analyst; persisted current price from FN2's market snapshot as of Oct 26, 2026. Not an FN2 forecast.

Firm-level rating actions

FMP grade actions identify the grading firm, not a named analyst.

FirmRatingPrior ratingActionDate
UBS Buy BuyMaintainOct 22, 2026
Needham Buy BuyMaintainOct 22, 2026
Morgan Stanley Overweight OverweightMaintainOct 22, 2026
Mizuho Outperform OutperformMaintainOct 22, 2026
Citigroup Buy BuyMaintainOct 22, 2026
Show 43 more rating actions

Named analyst price targets

Upside is calculated against the persisted current price $239.62. FMP does not supply a rating on these named-analyst rows.

FirmAnalyst52W targetPrice when postedUpsideDate
UBSTimothy Arcuri$400$233.66 +66.9%Oct 22, 2026
UBSAnalyst unavailable$345$238.58 +44.0%Oct 22, 2026
Mizuho SecuritiesAnalyst unavailable$360$260.81 +50.2%Oct 22, 2026
NeedhamAnalyst unavailable$290$260.81 +21.0%Oct 22, 2026
Morgan StanleyAnalyst unavailable$339$260.81 +41.5%Oct 22, 2026
See 140 more

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Company context

Snapshot as of publication

Lam Research Corporation is a prominent supplier of equipment vital for semiconductor processing, encompassing its design, production, sales, repair, and ongoing maintenance. These sophisticated systems are fundamental for the creation of integrated circuits. The company's extensive product catalog features a variety of deposition technologies. For tungsten metallization, they provide ALTUS systems that deposit conformal films. SABRE products excel in electrochemical deposition, crucial for copper interconnect transitions and enabling copper damascene manufacturing. SOLA utilizes ultraviolet thermal processing for film treatments, while VECTOR delivers plasma-enhanced chemical vapor deposition (CVD) and atomic layer deposition (ALD) solutions. Furthermore, SPEED addresses gapfill applications with its high-density plasma CVD products, and Striker is engineered for single-wafer atomic layer deposition of dielectric films.…

Historical context

All LRCX earnings
-1.0%FY2027 Q1 · Calendar Q4 2026+18.0%FY2026 Q4 · Calendar Q3 2026+3.6%FY2026 Q2 · Calendar Q1 2026

Technology peers this season

Latest reports in the same sector
CompanyQuarterEPS surpriseMarket moveHeadline
INFY Infosys Limited FY2027 Q2 · Calendar Q4 2026 -4.8% -6.6% Infosys trims growth outlook as AI revenue and deal wins accelerate
SSNC SS&C Technologies Holdings, Inc. FY2026 Q3 · Calendar Q4 2026 +0.6% +2.8% SS&C raises 2026 outlook as AI and tokenization support growth
ROP Roper Technologies, Inc. FY2026 Q3 · Calendar Q4 2026 +1.7% +9.7% Roper raises DEPS outlook as AI adoption expands across portfolio
VRSN VeriSign, Inc. FY2026 Q3 · Calendar Q4 2026 -2.0% -0.9% VeriSign reports record registrations as renewal mix becomes a key watchpoint
TTMI TTM Technologies, Inc. FY2026 Q3 · Calendar Q4 2026 +16.8% -27.7% TTM Technologies Q3: Record Growth, Higher Investment, More Deal Risk
NOK Nokia Oyj FY2026 Q3 · Calendar Q4 2026 +25.0% -14.8% Nokia Q3: AI and cloud growth lifts margins as cash flow stays negative

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Sources

  1. Earnings call transcript and parsed analysis · 2026-05-11T10:29:34.698584+00:00
  2. FN2 earnings calendar · 2026-07-26T00:37:12.209961+00:00
  3. Polygon adjusted daily market bars · 2026-07-28T08:52:39.189011+00:00
  4. Financial Modeling Prep analyst price-target consensus and quote snapshot · 2026-07-28T08:52:39.186658+00:00

Methodology

Reported and consensus figures come from FN2's earnings event records. Market reaction and volume are calculated from daily adjusted bars around the event; abnormal move subtracts the SPY move over the same window.

Analyst target low, average, and high values are derived at request time from each named analyst's latest persisted FMP target. The current-price marker comes from FN2's persisted market snapshot. They are sell-side estimates, not an FN2 valuation or recommendation.

Transcript intelligence is a structured synthesis of the current and prior earnings-call analyses. Missing values stay missing and are never estimated.

By FN2 Research · Updated · As of 2026-07-28. For educational purposes only; not investment advice.