3 Reasons Lam Research Is Worth a Closer Look Before July 29 Q4 Earnings

Lam Research (NASDAQ:LRCX | LRCX Price Prediction) enters its July 29 Q4 earnings report with AI spending driving record results across its semiconductor equipment business. Revenue grew nearly 24% last quarter, operating margins continued to expand, and management raised its 2026 wafer fabrication equipment forecast to $140 billion with additional upside possible.

Lam’s Earnings Are Growing Nearly Twice as Fast as Revenue

Lam has posted four consecutive EPS beats, most recently delivering $1.47 against a $1.3628 estimate on revenue of $5.84 billion, up 23.76% year over year. Non-GAAP operating margin expanded to 35.0% from 33.9%, and Q4 guidance calls for $6.60 billion in revenue and $1.65 in EPS at a 36.5% operating margin. Full-year FY25 net income grew 39.98%, reflecting genuine operating leverage.

A $140 Billion Upcoming Equipment Cycle

CEO Tim Archer raised the 2026 wafer fab equipment outlook to “$140 billion with a bias to the upside“ from $135 billion, and flagged that roughly $40 billion in NAND conversion spending is being pulled forward, with the majority landing before the end of calendar 2027.

Archer told investors, “Lam delivered record revenue and EPS in the March quarter as AI-driven demand reshapes the semiconductor industry.” Deferred Japan shipments awaiting acceptance jumped to $434 million from $226 million, which signals growing backlog.

Lam Returned More Than $1B to Investors Last Quarter

Lam returned $1.16 billion in buybacks in a single quarter and pays a $0.26 quarterly dividend, with $4.3 billion remaining on the repurchase authorization.

With 25 Buy and 4 Strong Buy ratings against 1 Sell and an analyst target of $372.32, Lam Research looks attractive at its current price of $283.58.

Lam Is Cheaper and Growing Faster Than KLA

KLA Corporation (NASDAQ:KLAC) trades at a forward P/E of 41x with quarterly earnings growth of just 11.8% and revenue growth of 11.5%. Lam trades a touch cheaper with a forward P/E of 38x, but the business is seeing much higher growth, with quarterly earnings growth of 40.8% on 23.8% revenue growth.

Applied Materials (NASDAQ:AMAT) is closer on valuation at 34x forward, but its 11.4% revenue growth tells the same story. Lam is growing fastest while returning the most capital through buybacks and dividends.

China Is a Risk, but Growth Is Already Broadening

China concentration sits at 34% of revenue, and prediction markets place a 71% probability on that mix staying below 34% in Q4. Revenue still expanded 23.76% year over year under the current export control regime, with Korea and Taiwan each contributing $1.34 billion.

With margins expanding, billions remaining for buybacks, and semiconductor equipment spending expected to reach $140 billion this year, the July 29 report could reinforce Lam’s position as a leading way to invest in the AI chip buildout.

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