Lam Research (NASDAQ:LRCX) Shares Down 9.7% - Should You Sell?

Key Points

• Lam Research shares fell 9.7% on Wednesday, dropping from $433.33 to as low as $381.00 as trading volume jumped 64% above average, suggesting a sharp reaction in the stock.
• The company’s recent narrative remains fundamentally positive, with coverage pointing to strong AI-related semiconductor equipment demand, solid earnings beats, and analyst price targets that have been raised as high as $475 to $500.
• Despite the pullback, Lam Research reported better-than-expected quarterly results with revenue up 23.8% year over year, and it continues to attract institutional support; however, some coverage notes valuation concerns after its large run-up.

Lam Research Corporation (NASDAQ:LRCX - Get Free Report) shares dropped 9.7% on Wednesday . The stock traded as low as $381.00 and last traded at $391.26. 18,564,439 shares traded hands during trading, an increase of 64% from the average daily volume of 11,333,401 shares. The stock had previously closed at $433.33.

More Lam Research News

Here are the key news stories impacting Lam Research this week:

• Positive Sentiment: Several recent articles highlight that Lam Research is benefiting from robust demand for wafer-fab equipment tied to AI infrastructure, advanced memory, foundry, and advanced packaging, which could support further revenue and margin expansion. Can AI Demand Help Lam Research Hit New Highs for Gross Margin in Q4?
• Positive Sentiment: Analysts remain broadly constructive on LRCX, with recent target increases as high as $475 to $500 and continued buy/overweight ratings, reinforcing expectations for upside. Is Lam Research (LRCX) a Buy as Wall Street Analysts Look Optimistic?
• Positive Sentiment: The stock’s strong year-to-date rally and record highs in chip-equipment peers suggest momentum is being driven by sector-wide optimism around semiconductor capital spending. Lam Research Stock, Chip Gear Peers Hit Record Highs
• Positive Sentiment: Lam Research was added to the Russell Top 50 Index, which can boost institutional visibility and passive fund demand. Lam Research (LRCX) Joins The Russell Top 50 Index As Its Market Profile Grows
• Neutral Sentiment: Multiple writeups focus on the company’s history of beating earnings estimates and suggest another beat is possible, but this is more of a preview than a fresh catalyst. Will Lam Research (LRCX) Beat Estimates Again in Its Next Earnings Report?
• Neutral Sentiment: Some coverage raises valuation concerns after the stock’s big run, but this has not yet overwhelmed the positive AI and earnings narrative. Lam Research NASDAQ: LRCX Rally Puts Valuation In Focus

Analyst Upgrades and Downgrades

LRCX has been the subject of several recent research reports. Evercore boosted their target price on shares of Lam Research from $275.00 to $300.00 and gave the stock an "outperform" rating in a research report on Thursday, April 23rd. New Street Research lifted their price objective on shares of Lam Research from $235.00 to $280.00 and gave the company a "neutral" rating in a research note on Monday, April 27th. The Goldman Sachs Group reiterated a "buy" rating and issued a $290.00 price objective on shares of Lam Research in a report on Thursday, April 23rd. Sanford C. Bernstein increased their target price on shares of Lam Research from $325.00 to $340.00 and gave the stock an "outperform" rating in a research report on Thursday, May 21st. Finally, Wall Street Zen lowered Lam Research from a "buy" rating to a "hold" rating in a report on Sunday, May 10th. Twenty-eight equities research analysts have rated the stock with a Buy rating and six have assigned a Hold rating to the company. According to MarketBeat.com, the company has an average rating of "Moderate Buy" and an average target price of $345.39.

Lam Research Trading Down 9.7%

The company has a quick ratio of 1.77, a current ratio of 2.54 and a debt-to-equity ratio of 0.35. The company has a market capitalization of $489.45 billion, a price-to-earnings ratio of 73.85, a P/E/G ratio of 3.40 and a beta of 1.85. The company has a 50-day moving average price of $320.21 and a 200-day moving average price of $253.79.

Lam Research (NASDAQ:LRCX - Get Free Report) last released its earnings results on Wednesday, April 22nd. The semiconductor company reported $1.47 earnings per share (EPS) for the quarter, beating analysts' consensus estimates of $1.36 by $0.11. Lam Research had a return on equity of 66.21% and a net margin of 30.94%.The firm had revenue of $5.84 billion for the quarter, compared to analyst estimates of $5.70 billion. During the same quarter last year, the firm posted $1.04 EPS. The company's revenue was up 23.8% on a year-over-year basis. Lam Research has set its Q4 2026 guidance at 1.500-1.800 EPS. Research analysts predict that Lam Research Corporation will post 5.68 EPS for the current fiscal year.

Lam Research Announces Dividend

The business also recently announced a quarterly dividend, which will be paid on Wednesday, July 8th. Investors of record on Wednesday, June 17th will be given a dividend of $0.26 per share. The ex-dividend date of this dividend is Wednesday, June 17th. This represents a $1.04 dividend on an annualized basis and a yield of 0.3%. Lam Research's payout ratio is 19.62%.

Insider Activity at Lam Research

In other Lam Research news, Director Eric Brandt sold 54,500 shares of the stock in a transaction on Thursday, June 11th. The shares were sold at an average price of $350.80, for a total value of $19,118,600.00. Following the completion of the sale, the director directly owned 199,205 shares of the company's stock, valued at $69,881,114. This represents a 21.48% decrease in their position. The sale was disclosed in a document filed with the Securities & Exchange Commission, which is available at this link. The transaction was executed under a pre-arranged Rule 10b5-1 trading plan. Also, insider Ava Harter sold 6,010 shares of the firm's stock in a transaction on Monday, April 27th. The stock was sold at an average price of $258.66, for a total transaction of $1,554,546.60. Following the completion of the sale, the insider owned 53,205 shares in the company, valued at $13,762,005.30. This represents a 10.15% decrease in their ownership of the stock. The disclosure for this sale is available in the SEC filing. Insiders sold a total of 86,339 shares of company stock worth $27,680,267 in the last ninety days. 0.31% of the stock is currently owned by insiders.

Institutional Trading of Lam Research

A number of hedge funds have recently modified their holdings of the company. PMV Capital Advisers LLC acquired a new stake in Lam Research during the fourth quarter worth $25,000. Stance Capital LLC bought a new position in shares of Lam Research during the 3rd quarter worth about $26,000. Bayban acquired a new stake in shares of Lam Research during the 4th quarter valued at about $26,000. Vermillion Wealth Management Inc. bought a new stake in Lam Research in the first quarter valued at about $26,000. Finally, Cedar Mountain Advisors LLC lifted its stake in Lam Research by 242.9% during the first quarter. Cedar Mountain Advisors LLC now owns 120 shares of the semiconductor company's stock worth $26,000 after purchasing an additional 85 shares during the period. Institutional investors own 84.61% of the company's stock.

About Lam Research

Lam Research Corporation NASDAQ: LRCX is a global supplier of wafer fabrication equipment and services to the semiconductor industry. Founded in 1980 by David K. Lam and headquartered in Fremont, California, the company develops and manufactures systems used in multiple stages of semiconductor device production, including thin film deposition, plasma etch, wafer cleaning and related process modules and automation.

Lam's product portfolio covers core process technologies employed by logic and memory manufacturers, with equipment designed to support advanced-node patterning, 3D NAND and other emerging device architectures.

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