Summit downgrades Lam Research on limited catalysts beyond 2025

Investing.com -- Summit Insights downgraded Lam Research (NASDAQ: LRCX) to Hold from Buy, saying while the chip equipment maker continues to benefit from strong demand in 2025, wafer fabrication equipment (WFE) spending is likely to moderate in 2026.

The firm acknowledged upside in the near term from technology transitions such as Gate-All-Around, backside power delivery, and dry EUV photoresist. However, it flagged weaker visibility beyond this cycle, particularly in logic and memory markets.

We expect the stock will be an inline performer, Summit wrote, noting a lack of catalysts in the medium term and a likely pullback in NAND and DRAM investment after this year’s spending surge.

For the June quarter, Lam reported sales of $5.17 billion, up 9.6% sequentially and ahead of consensus. System sales rose 13%, led by a 53% jump in NAND-related shipments and a 23% increase in foundry demand. Sales to China climbed 24%, making up 35% of revenue.

Gross margin expanded 130 basis points to 50.3%, driven by mix and volume.

For the September quarter, Lam expects revenue of $5.2 billion, above Wall Street forecasts, but flagged a likely sequential decline in December based on order trends.

Management raised its 2025 WFE forecast to $105 billion, up from $100 billion, and said it expects to outperform the broader market this year—driven by NAND and advanced foundry demand—but Summit warned those tailwinds may ease next year.

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