Can Lam Research Sustain $5B-Plus Revenue Streak on Foundry Strength?

Core Insights - Lam Research Corporation (LRCX) reported record first-quarter fiscal 2026 revenues of $5.32 billion, a 28% year-over-year increase, driven by strong demand in the foundry and logic sectors [1][9] - The foundry business accounted for approximately 60% of the Systems segment revenues, up from 52% in the previous quarter, indicating a growing demand for etch and deposition tools used in AI and high-performance computing [2][9] - The foundry market remains resilient as global chipmakers expand capacity to meet rising demand for data center and AI-related chips, with LRCX securing recent deals for advanced technologies [3][4] Revenue and Growth Projections - Analysts project that LRCX's revenue streak of over $5 billion will continue, with estimates for the second and third quarters set at $5.22 billion each [4] - The Zacks Consensus Estimate indicates a year-over-year earnings increase of approximately 14% for fiscal 2026 and 15.2% for fiscal 2027, with recent upward revisions in earnings estimates [14] Competitive Landscape - Major competitors in the semiconductor equipment market include Applied Materials, Inc. (AMAT) and KLA Corporation (KLAC), with AMAT directly competing in deposition and etch technologies [5] - KLA Corporation specializes in process control and inspection tools, which are essential for maintaining yield and quality in advanced chip production, although it does not compete directly with LRCX in core technologies [6] Share Price and Valuation - LRCX shares have surged 115.4% year to date, outperforming the Zacks Electronics – Semiconductors industry's gain of 46.6% [7] - The company trades at a forward price-to-earnings ratio of 31.56, which is significantly lower than the industry's average of 39.07 [11]