TD Cowen has increased its price target for Lam Research (ticker: LRCX) to $290 from $170 while keeping a Buy rating on the semiconductor equipment manufacturer. The stock was trading at $245.17 at the time of the research note, having risen 221.72% over the prior twelve months and 143.02% over the past six months, according to InvestingPro figures.
The firm’s substantial upward revision follows Lam Research’s refreshed view of the wafer fabrication equipment market. Lam expects WFE spending to reach $135 billion in 2026, representing 23% year-over-year growth - a projection that tops TD Cowen’s earlier estimate of $120 billion. That outlook, combined with Lam’s own revenue growth of 25.66% over the last twelve months, led TD Cowen to model stronger future profitability for the company.
TD Cowen now forecasts Lam to earn approximately $5.77 per share in calendar year 2026, ahead of the consensus estimate of $5.37 per share. For calendar year 2027 the firm projects earnings of about $7.30 per share, roughly 8% higher than Street pre-earnings expectations. At current levels, the stock trades at a price-to-earnings ratio of 53.13 based on near-term earnings, a premium that suggests investors are pricing in continued rapid growth.
The research note also highlighted segment and regional dynamics. TD Cowen expects Lam’s business exposure to China to be "flattish" this year. It anticipates that DRAM and leading-edge foundry spending will outpace NAND, and it observed that Lam intends to outgrow the broader WFE market for a third consecutive year. Those factors, together with anticipated acceleration in leading-edge foundry spending in 2027, support the firm’s expectation of high-teens percentage growth for Lam next year despite current constraints.
TD Cowen acknowledged existing limitations in cleanroom capacity but argued that the broader strength in WFE demand and the forecasted acceleration in foundry investments underpin its bullish revenue and earnings trajectory for Lam Research.
Other sell-side activity has moved in a similar direction. JPMorgan raised its target to $300 from $165 and maintained an Overweight rating, citing increased customer expedite requests and improvements in operational execution. Berenberg lifted its target to $265 from $250, noting the positive guidance on WFE spending with capital expenditures expected to reach $135 billion in 2026. Evercore ISI raised its target to $275 from $241 after Lam reported an earnings beat and raised guidance, echoing the 23% year-over-year WFE spending projection for 2026.
At the same time, Wolfe Research held its Peerperform rating following the company’s strong guidance, and KeyBanc reiterated its Sector Weight stance after reviewing results. Analyst targets across the street range substantially, spanning from $115 to $300.
Lam’s recent operating updates contributed to the re-rating. The company reported second-quarter results that exceeded market expectations and delivered guidance above consensus. It also published December quarter results that modestly beat forecasts and provided guidance for the March quarter projecting revenue of $5.7 billion. That guidance equates to a 7% sequential increase and a 21% year-over-year rise, and it was presented as being 7% ahead of Street expectations.
Despite the upbeat earnings and forecast revisions, valuation remains a point of attention. InvestingPro analysis noted that the stock appears overvalued relative to its Fair Value while acknowledging the wide dispersion in analyst price targets. For investors, the combination of robust WFE market projections, accelerating foundry spending in 2027, and current cleanroom capacity limits outlines both the upside drivers and the operational constraints that will influence Lam’s near-term performance.
Summary - TD Cowen raised its price target on Lam Research to $290 from $170, maintaining a Buy rating after Lam projected a $135 billion WFE market for 2026, equating to 23% annual growth and surpassing the firm’s prior WFE estimate. The broker increased its earnings forecasts to $5.77 per share for 2026 and $7.30 for 2027, and several other brokers updated targets higher. Lam’s recent quarterly results beat expectations and the company guided March quarter revenue to $5.7 billion, a figure above Street estimates.