Lam Research (NASDAQ:LRCX) Stock Price Down 2.7% - Should You Sell?

Key Points

• Lam Research shares fell 2.7% to $301.11 amid a broader decline in semiconductor-equipment stocks as investors locked in gains after a strong AI-driven rally.
• Analyst sentiment remains positive: the stock has a “Moderate Buy” consensus rating and a $364.59 average price target, while DBS raised its target to $416 and Erste Group increased its earnings forecasts.
• Lam reported record quarterly results, with revenue up 30% year over year and EPS beating estimates, but investors may remain cautious ahead of the October 21 earnings call due to semiconductor-cycle risks and recent insider selling.

Lam Research Corporation (NASDAQ:LRCX - Get Free Report)'s share price fell 2.7% on Tuesday. The company traded as low as $290.90 and last traded at $301.11. 8,143,273 shares traded hands during mid-day trading, a decline of 24% from the average session volume of 10,660,307 shares. The stock had previously closed at $309.56.

Key Headlines Impacting Lam Research

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

• Positive Sentiment: DBS Bank raised its price target to $416, signaling continued confidence in Lam Research’s growth outlook. DBS Bank lifts target to USD 416 for Lam Research stock
• Positive Sentiment: Erste Group Bank increased its earnings forecasts, raising projected FY2027 EPS to $9.40 from $9.34 and FY2028 EPS to $11.99 from $11.68. Other recent analyst targets have generally remained well above the current trading level, with Quiver Quantitative reporting a six-month median target of $387.50. Lam Research analyst estimates
• Positive Sentiment: Analysts continue to anticipate strong results and guidance. UBS identified Lam Research among semiconductor companies likely to post solid results, while a Seeking Alpha analysis characterized the company’s FY2027 setup as attractive ahead of its next quarterly report. Lam’s latest quarter featured record revenue, margins and EPS, with management guiding to another strong quarter.
• Neutral Sentiment: Lam Research is scheduled to hold its next quarterly financial conference call on October 21. Investors may remain cautious ahead of that update, particularly because the company is closely tied to wafer-fabrication spending and the broader AI semiconductor cycle. Why Lam Research stock is down today
• Negative Sentiment: Semiconductor-equipment shares are broadly declining as investors lock in gains after a powerful year fueled by AI spending. Applied Materials and KLA also fell, suggesting sector-wide valuation and risk concerns are weighing on LRCX rather than a Lam-specific operational problem. Semiconductor equipment stocks slide as investors take profits
• Negative Sentiment: Reported insider activity has consisted entirely of sales over the past six months, including transactions by senior executives. Although such sales may reflect diversification or scheduled transactions, they can add to short-term investor caution.

Analyst Upgrades and Downgrades

LRCX has been the topic of several recent analyst reports. Needham & Company LLC reiterated a "buy" rating and issued a $390.00 target price on shares of Lam Research in a report on Thursday, July 30th. Berenberg Bank set a $420.00 price target on shares of Lam Research in a report on Wednesday, September 9th. Stifel Nicolaus raised their price target on Lam Research from $325.00 to $425.00 and gave the company a "buy" rating in a research report on Friday, July 10th. Mizuho dropped their price objective on Lam Research from $370.00 to $365.00 and set an "outperform" rating on the stock in a research note on Tuesday, August 25th. Finally, Oppenheimer reissued an "outperform" rating and set a $400.00 price objective (up from $330.00) on shares of Lam Research in a research report on Monday, June 15th. One equities research analyst has rated the stock with a Strong Buy rating, twenty-six have issued a Buy rating and five have issued a Hold rating to the stock. According to data from MarketBeat.com, Lam Research presently has a consensus rating of "Moderate Buy" and a consensus price target of $364.59.

Lam Research Stock Down 2.7%

The firm's 50-day simple moving average is $311.28 and its 200-day simple moving average is $306.87. The company has a debt-to-equity ratio of 0.30, a quick ratio of 1.91 and a current ratio of 2.63. The company has a market capitalization of $376.82 billion, a price-to-earnings ratio of 52.28, a price-to-earnings-growth ratio of 1.26 and a beta of 1.85.

Lam Research (NASDAQ:LRCX - Get Free Report) last announced its quarterly earnings data on Wednesday, July 29th. The semiconductor company reported $1.82 EPS for the quarter, beating analysts' consensus estimates of $1.69 by $0.13. Lam Research had a net margin of 31.27% and a return on equity of 67.60%. The business had revenue of $6.72 billion during the quarter, compared to analyst estimates of $6.66 billion. During the same quarter in the prior year, the business earned $1.33 earnings per share. The firm's revenue for the quarter was up 30.0% on a year-over-year basis. Lam Research has set its Q1 2027 guidance at 2.000-2.300 EPS. Sell-side analysts forecast that Lam Research Corporation will post 9.34 earnings per share for the current year.

Lam Research Increases Dividend

The company also recently disclosed a quarterly dividend, which will be paid on Wednesday, October 14th. Shareholders of record on Wednesday, September 23rd will be given a $0.33 dividend. The ex-dividend date is Wednesday, September 23rd. This represents a $1.32 dividend on an annualized basis and a dividend yield of 0.4%. This is an increase from Lam Research's previous quarterly dividend of $0.26. Lam Research's dividend payout ratio is 22.92%.

Insider Activity at Lam Research

In related news, insider Ava Harter sold 5,000 shares of the firm's stock in a transaction on Monday, August 31st. The stock was sold at an average price of $302.46, for a total value of $1,512,300.00. Following the completion of the transaction, the insider directly owned 42,462 shares of the company's stock, valued at $12,843,056.52. This trade represents a 10.53% decrease in their ownership of the stock. The sale was disclosed in a document filed with the Securities & Exchange Commission, which is available through this hyperlink. The transaction was executed under a pre-arranged Rule 10b5-1 trading plan. Also, Director Bethany Mayer sold 9,557 shares of Lam Research stock in a transaction on Wednesday, September 9th. The stock was sold at an average price of $314.74, for a total transaction of $3,007,970.18. Following the sale, the director owned 20,995 shares in the company, valued at $6,607,966.30. This represents a 31.28% decrease in their position. Additional details regarding this sale are available in the official SEC disclosure. 0.31% of the stock is currently owned by company insiders.

Institutional Inflows and Outflows

Several hedge funds have recently bought and sold shares of the stock. State Street Corp boosted its position in Lam Research by 2.6% in the second quarter. State Street Corp now owns 60,704,130 shares of the semiconductor company's stock valued at $26,320,468,000 after buying an additional 1,545,830 shares in the last quarter. Bank of America Corp DE increased its holdings in shares of Lam Research by 5.5% during the second quarter. Bank of America Corp DE now owns 11,244,147 shares of the semiconductor company's stock worth $4,872,426,000 after buying an additional 584,489 shares in the last quarter. Van ECK Associates Corp raised its stake in shares of Lam Research by 411.8% in the second quarter. Van ECK Associates Corp now owns 11,089,395 shares of the semiconductor company's stock valued at $4,805,368,000 after acquiring an additional 8,922,854 shares during the last quarter. Invesco Ltd. raised its stake in shares of Lam Research by 7.7% in the fourth quarter. Invesco Ltd. now owns 22,821,354 shares of the semiconductor company's stock valued at $3,906,559,000 after acquiring an additional 1,638,406 shares during the last quarter. Finally, Bank of New York Mellon Corp acquired a new position in shares of Lam Research in the 2nd quarter worth approximately $3,777,585,000. 84.61% of the stock is currently owned by institutional investors and hedge funds.

About Lam Research

Lam Research Corporation is a semiconductor equipment company that designs, manufactures, and services systems used in the fabrication of integrated circuits and other electronic devices. Its equipment supports key steps in the wafer manufacturing process, helping semiconductor producers create increasingly small and complex features on silicon wafers.

The company's portfolio includes systems for etch, deposition, wafer cleaning, surface preparation, and related manufacturing processes.

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