Foundry Drives LRCX's Systems Revenues: Will the Momentum Last?

Core Insights - Lam Research Corporation's Systems revenues increased by 48.3% year over year to $3.55 billion, primarily driven by the foundry business, which accounted for 60% of total Systems sales, up from 52% in the previous quarter [1][10] Group 1: Business Performance - The foundry business is benefiting from rising investments in advanced chip manufacturing, particularly for AI and high-performance computing applications [2] - New technologies such as the Aether dry resist EUV patterning solution and the Akara conductor etch system are gaining traction with leading-edge chipmakers, enhancing pattern precision and process efficiency for next-generation transistor production [3][4] - Analysts project that Systems revenues for fiscal 2026 will reach $13.83 billion, indicating a year-over-year growth of 20.4% [5] Group 2: Competitive Landscape - Major competitors in the semiconductor equipment market include Applied Materials, which competes directly in deposition and etch technologies, and KLA Corporation, which specializes in process control and inspection tools [6][7] Group 3: Financial Metrics - Lam Research's shares have surged 123.8% year to date, outperforming the Zacks Electronics – Semiconductors industry's gain of 41% [8] - The company trades at a forward price-to-earnings ratio of 32.37, lower than the industry's average of 37.17 [12] - The Zacks Consensus Estimate for fiscal 2026 and 2027 earnings implies year-over-year increases of approximately 14% and 15.2%, respectively, with upward revisions in the past 30 days [15]