Overview
Lynx Equity has raised its target price for Lam Research (NASDAQ: LRCX) from $175 to $280, pointing to what it describes as under-appreciated earnings potential extending into 2027. The upgrade comes despite Lam’s stock having gained roughly 125 percent over the last six months.
Why Lynx raised the target
The research firm says Wall Street may still be underestimating Lam’s earnings power for this year and into next. Lynx expects Lam’s next earnings report to prompt further upward revisions to consensus estimates, asserting that the company’s longer-term earnings trajectory is not fully captured in current street forecasts.
To support its view, Lynx raised its market forecasts for wafer fabrication equipment, or WFE, to $140 billion for 2026 and $170 billion for 2027. These projections compare with Street estimates Lynx cites of $120-130 billion for 2026 and $130-140 billion for 2027. The firm notes that its WFE outlook for 2026-2027 implies cumulative spending roughly 50 percent higher than the 2024-2025 period.
Near-term modeling and positioning
While acknowledging that a beat-and-raise may already be factored into Lam’s share price, Lynx remains constructive and says it is a buyer ahead of the company’s earnings release. The firm models Lam’s March quarter revenue at $5.7 billion and earnings per share at $1.34, figures it says are roughly in line with consensus expectations.
Lynx also warns that management conservatism on the upcoming call could trigger a near-term pullback in the stock. The firm argues such a move should be treated as a buying opportunity, as it expects investors to eventually recognize the potential acceleration in earnings as management resumes investor roadshows into 2027.
Related activity in the sector: Applied Materials
In related sector developments, Applied Materials announced a quarterly cash dividend of $0.46 per share, payable on March 12, 2026. That payment represents the eighth consecutive year of dividend increases for the company, and follows a 15 percent increase from $0.40 to $0.46 in March 2025.
Analysts have also shown increased enthusiasm for Applied Materials. Deutsche Bank upgraded the stock from Hold to Buy, citing a favorable WFE environment. KeyBanc Capital Markets raised its price target to $380, pointing to demand from AI and changes in chip architecture. RBC Capital initiated coverage with an Outperform rating, noting the company’s relative performance despite pressures from mature node spending and China-related headwinds. Stifel increased its price target to $340 and kept a Buy rating, citing Applied Materials’ high-quality portfolio. Collectively, these moves reflect positive analyst sentiment toward Applied Materials’ prospects.
Implications
Lynx’s more bullish WFE estimates and the firm’s Lam Research price-target increase reinforce a broader optimistic tone among some analysts about semiconductor equipment demand into 2027. At the same time, the market remains sensitive to management commentary at earnings and to differing WFE forecasts among research shops.