The Memory Crunch Is Bigger Than Expected. 1 Top Stock to Buy on the Dip (Hint: Not Micron or Sandisk)
Lam Research (LRCX) is benefiting from a memory chip supply crunch, with revenue up 26% and earnings up 39% in fiscal 2026. The company expects 52% revenue growth and 71% earnings growth in the current quarter. Deloitte projects memory manufacturer capex to rise significantly, favoring Lam's semiconductor equipment sales. Analysts forecast 62% EPS growth for fiscal 2027, with potential for further upside.
How this was made
The 30-second read
Why it matters
Lam's guidance and historical performance position it for a rebound after a 30% pullback from its 52‑week high.
Market read
Lam's strong guidance amid a memory crunch creates a buying opportunity, potentially influencing the broader semiconductor equipment sector.
What to watch
Potential slowdown in AI spending or macro‑economic headwinds could temper equipment orders.
Background
The article frames Lam Research as a beneficiary of a prolonged memory shortage driving AI data‑center demand, citing Deloitte capex forecasts and recent price spikes in DRAM/NAND.
Ticker impact
Lam Research disclosed FY2026 revenue up 26% and EPS up 39%, and projected 52% revenue growth and 71% EPS growth for the current quarter, indicating a strong earnings outlook.
Potential short‑term rally as investors buy the dip on the projected growth.
Guidance beats prior expectations and aligns with a booming memory equipment market, creating a clear catalyst.
Market effects
Memory equipment demand may lift other suppliers like Applied Materials and KLA.
U.S. semiconductor sector could see broader gains as AI‑driven memory demand persists.
Higher capex in memory fabs worldwide supports global chip‑making supply chain.
Counterpoint
If memory supply catches up faster than expected, growth forecasts could be overstated.
Key entities
- CompanyLam Research
Semiconductor equipment maker with 46% revenue from memory equipment.
- Research FirmDeloitte
Provides capex forecasts for memory manufacturers.
