Berenberg has increased its price target on Lam Research (NASDAQ:LRCX) to $265.00 from $250.00 and retained a Buy rating on the semiconductor equipment supplier. The stock was trading at $239.58, sitting close to its 52-week high of $243.99, and has returned 221.7% over the past year, according to InvestingPro data.
The analyst move follows Lam Research’s earnings conference call on January 28, during which the company provided constructive guidance on wafer fabrication equipment spending trends. Lam outlined expectations that WFE capital expenditure will reach $135 billion in 2026, up 23% from an estimated $110 billion in 2025. The firm also pointed to its own recent operating strength, noting 25.7% revenue growth in the last twelve months.
Management told investors that growth in 2026 WFE spending will likely be constrained by a shortage of available cleanroom space to host equipment. Despite that constraint, Lam signaled it anticipates revenue to rise each quarter beginning in March, and to be higher in the second half of 2026 compared with the first half.
Lam expects the bulk of 2026 WFE spending to be driven by DRAM and leading-edge foundry logic customers. For NAND memory, the company foresees a pattern where technology migration precedes the addition of new capacity - a dynamic the company expects will play to Lam’s strengths as it expands its portfolio of deposition and etching solutions.
Looking beyond 2026, management indicated expectations for continued growth into 2027, an outlook that Berenberg characterizes as part of a positive near-term WFE spending trend. Berenberg’s view parallels commentary from other industry participants referenced by the company.
Investors should take into account valuation metrics. Lam was trading at a price-to-earnings ratio of 53.1, a level identified by InvestingPro as high relative to near-term earnings growth. For subscribers, InvestingPro’s Pro Research Report offers a deeper look at whether current valuation is supported by the company’s growth trajectory.
Lam posted December-quarter results that slightly exceeded expectations and provided guidance for March-quarter revenue of $5.7 billion. That March-quarter projection represents a 7% increase from the previous quarter and a 21% rise from the same period a year earlier, and it surpassed Street forecasts by 7%.
Following the strong guidance, several brokerages adjusted their views and targets. Wolfe Research kept its Peerperform rating for Lam Research. Evercore ISI raised its price target to $275, citing the earnings beat and the projected step-up in WFE spending to $135 billion by 2026. RBC Capital lifted its target to $290, attributing the change to Lam’s robust quarterly results and market share gains. BofA Securities increased its target to $285, describing the quarter as a "solid beat and raise" within what it sees as a multi-year growth cycle. Oppenheimer adjusted its price target to $265, highlighting management’s guidance for significant revenue growth in calendar year 2026. Collectively, these moves indicate a broadly favorable view among multiple analyst firms regarding Lam’s prospects.
Context and implications
Lam Research’s guidance centers WFE spending as a core driver of near-term demand for its deposition and etch equipment. The company’s assessments about where spending will be concentrated - DRAM and leading-edge foundry logic - and the timing dynamics for NAND technology migration inform how Lam expects its product mix to participate in the upgrade cycle.
At the same time, the company flagged physical constraints - namely limited cleanroom space - as a potential cap on how quickly equipment deployments can translate into spending growth, an operational factor that could affect equipment suppliers and chipmakers alike.
Bottom line
Berenberg’s price-target increase to $265 reflects analyst optimism following Lam’s earnings call and elevated WFE spending forecasts, while multiple other brokerages also lifted targets after the quarter. Market participants should weigh strong demand signals against valuation and the supply-side constraint of available cleanroom capacity when assessing the risk-reward profile of LRCX shares.