Overview
RBC Capital raised its price target on Lam Research (LRCX) to $290 from $260 while maintaining an Outperform rating on the semiconductor equipment maker. The revised target implies upside from a current stock price of $239.58, with the share price trading just under its 52-week high of $243.99.
Drivers behind the revision
The increase in the price objective follows a robust December 2025 quarter for Lam Research, which RBC attributed to a favorable wafer fabrication equipment (WFE) environment and gains in market share. Company management has provided guidance calling for roughly 23% WFE growth in 2026, a pace that exceeds RBC’s prior expectations and underpins the firm's decision to raise both its price target and earnings estimates.
Lam Research’s recent results and outlook have been accompanied by strong market returns, with reported total price returns of 221.72% over the past year and 143.02% over the last six months, underscoring investor confidence in the company’s position in the equipment market.
Segment trends and product strength
While NAND memory spending is described as variable, Lam has made notable traction in the foundry segment and is benefiting from demand for chip-on-wafer-on-substrate (CoWoS) and high-bandwidth memory (HBM) applications. Revenue for the trailing twelve months rose 25.66% to $19.59 billion, reflecting those dynamics.
RBC expects WFE tailwinds to continue into 2027, supported by growing demand related to artificial intelligence workloads and constrained supply in the memory sector. The research note also highlights technology transitions - including MolyB, Backside Power and 4F2 - as additional avenues for Lam Research to capture growth.
Valuation and balance-sheet notes
Lam Research is trading at a price-to-earnings ratio of 53.13, a level that reflects elevated growth expectations. At the same time, the company’s balance sheet metrics are viewed positively, with an external assessment rating its financial health as "GREAT." The company has a market capitalization of $300.92 billion and has grown its dividend by 13.04%, maintaining dividend payments for 12 consecutive years.
Analyst updates and quarterly results
Along with the price-target increase, RBC raised its earnings estimates for Lam Research while reiterating the Outperform rating. Other sell-side firms have also adjusted their views in light of the company’s results and guidance. BofA Securities raised its price target to $285 and maintained a Buy rating, pointing to a "solid beat and raise" as evidence of accelerating growth within the wafer fabrication equipment cycle. Oppenheimer lifted its target to $265 from $200 and kept an Outperform rating, citing Lam’s guidance for approximately 24% or higher revenue growth for calendar year 2026. Summit Insights upgraded the stock from Hold to Buy, anticipating gains in forthcoming technology transitions across various memory segments.
Lam Research reported second-quarter results for fiscal 2026 that exceeded expectations. The company posted earnings per share of $1.27, above the consensus forecast of $1.16, and revenue of $5.34 billion versus an expected $5.21 billion. That performance equated to a 9.48% earnings surprise and reinforced the market’s positive reception to the firm’s trajectory.
Implications
The combination of a strong December 2025 quarter, management guidance calling for substantial WFE growth in 2026, and analyst upward revisions underpin the recent wave of bullish research notes. The outlook ties directly to demand drivers such as AI-related compute requirements and tightness in memory supply, and it positions Lam Research to benefit from ongoing technology transitions in semiconductor manufacturing.
Key figures cited
- New RBC price target: $290 (previously $260)
- Current share price cited: $239.58
- 52-week high: $243.99
- One-year price total return: 221.72%
- Six-month price total return: 143.02%
- Management WFE growth forecast for 2026: ~23%
- Trailing twelve-month revenue growth: 25.66% to $19.59 billion
- P/E ratio cited: 53.13
- Market capitalization: $300.92 billion
- Dividend growth rate cited: 13.04%; dividends paid 12 consecutive years
- Fiscal 2026 Q2 EPS: $1.27 versus $1.16 expected
- Fiscal 2026 Q2 revenue: $5.34 billion versus $5.21 billion expected
- Earnings surprise: 9.48%
Conclusion
RBC’s decision to boost its price target and raise earnings estimates for Lam Research reflects confidence in an ongoing WFE upcycle and the company’s share gains across key product areas. Multiple analysts have adjusted targets or ratings upward after the company’s better-than-expected results and management guidance for elevated growth in 2026.