Can Foundry Strength Keep Lam Research's $5B+ Revenue Streak Alive?

Core Insights - Lam Research Corporation (LRCX) has achieved revenues exceeding $5 billion for three consecutive quarters, with Q2 fiscal 2026 revenues increasing by 22% to $5.34 billion, driven by strong demand in the wafer fabrication equipment market [1][10] Financial Performance - In Q2 fiscal 2026, Systems revenues rose 28% year over year to $3.36 billion, with the foundry business contributing 59% of total Systems sales, up from 35% in the previous year [2][10] - Analysts project Q3 fiscal 2026 revenues for Lam Research at $5.74 billion, indicating a year-over-year increase of 21.7%, with Systems revenues expected to grow by 22% [5][10] Market Position and Technology - Lam Research's foundry business benefits from increased investments in advanced chip manufacturing, particularly for AI and high-performance computing applications [2][4] - The company is gaining traction with new technologies such as the Aether dry resist EUV patterning solution and the Akara conductor etch system, which enhance pattern precision and process efficiency [3] Competitive Landscape - Major competitors in the foundry equipment market include Applied Materials, Inc. and KLA Corporation, with Applied Materials directly competing in deposition and etch technologies [6][7] Valuation and Earnings Estimates - Lam Research's shares have increased by 200.4% over the past year, outperforming the Zacks Electronics – Semiconductors industry's gain of 50.4% [8] - The forward price-to-earnings ratio for Lam Research is 39.75, significantly higher than the industry average of 32.07 [11] - Earnings estimates for fiscal 2026 and 2027 imply year-over-year increases of approximately 27.1% and 25.6%, respectively, with recent upward revisions in estimates [14]