Lam Research (LRCX) Gains as AI-Driven Memory Shortage Fuels Equipment Demand

Lam Research (LRCX) has surged 293% over the past year as AI data center demand strains memory-chip supply, prompting manufacturers including Micron (MU) and SanDisk (SNDK) to expand capacity and lift spending on semiconductor equipment. The company, which generates 39% of revenue from memory manufacturing equipment, reported fiscal third-quarter revenue of $5.84 billion for the period ended March 29, 2026, up 24% from a year earlier. Profit rose 41%, helped by higher-margin product sales and improved factory efficiency. Lam forecast fiscal fourth-quarter revenue of $6.6 billion, implying about 27% year-over-year growth. Lam raised its 2026 wafer fabrication equipment spending estimate to $140 billion from $135 billion and said 2027 could see continued growth. It previously estimated NAND flash makers would spend $40 billion over several years on plant upgrades, with much of that investment expected by the end of 2027. If fiscal 2028 EPS reaches $9.53 and the stock trades at 43 times earnings, shares could reach $410, implying about 38% upside.