Lam Research Corporation (NASDAQ:LRCX) stock surged on Thursday after the company reported better-than-expected fiscal fourth-quarter 2026 results, issued strong forward guidance on Wednesday and drew a wave of bullish analyst commentary.

The stock received a rating reaffirmation from Needham on Thursday. Needham analyst Charles Shi maintained a Buy rating and a $390 price forecast on the stock following the release of the company’s second calendar quarter of 2026 financial performance and updated guidance metrics.

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Results Exceed Guidance Across Metrics

Lam Research generated second calendar quarter of 2026 revenue of $6.7 billion, representing a 15% quarter-over-quarter increase that landed above the midpoint of company guidance. CSBG results were “driven primarily by NAND upgrades and spares,” Needham said.

By end-market, NAND revenue increased 120% quarter-over-quarter, and Logic/IDMs grew 64% sequentially. Foundry revenue fell 7% quarter-over-quarter, and DRAM declined 2%. Geographically, revenue from the U.S. rose 70% quarter-over-quarter, Taiwan grew 38%, and Korea remained flat. Gross margin reached a record 52%, up 210 basis points sequentially, driven by pricing actions, operational efficiencies and favorable product mix.

Revenue Guidance Stepped Up

For third quarter of the 2026 calendar year, Lam Research issued revenue guidance of $8.1 billion plus or minus $400 million, indicating a 21% quarter-over-quarter sequential increase.

Needham expects Systems revenue to lead this growth with a 32% quarter-over-quarter gain, alongside a ~1% sequential increase in CSBG revenue. Gross margin guidance for third quarter of the 2026 calendar year stands at 52% plus or minus 1%.

Industry Outlook Raised

Management raised its calendar year 2026 Wafer Fab Equipment (WFE) outlook to the low $150 billion range, up from the prior forecast of $140 billion. Additionally, the company increased its Calendar Year 2026 advanced packaging growth forecast to over 70% year-over-year, compared to the previous over 50% estimate. Management introduced a multi-year target to achieve gross margins in the mid-50% range and operating margins in the mid-40% range.

Needham Adjusts Multi-Year Estimates

Following the report, Needham raised its Calendar Year 2027 earnings per share estimate for Lam Research to $9.93 from $8.71 and raised its Calendar Year 2028 EPS forecast to $10.20 from $9.70. Needham’s $390 price forecast reflects a 38 fold multiple on its updated Calendar Year 2028 non-GAAP EPS projection, down from a 40 fold multiple previously applied to account for sector-wide multiple compression.

LRCX Stock Price Activity: Lam Research shares were up 18.53% at $299.12 at the time of publication on Thursday, according to Benzinga Pro data.

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