Lam Research sees WFE topping US$200 billion in 2027

The Nasdaq Composite fell 2.60% to 26,008.86 on Thursday, driven by declines in Meta Platforms (down 7%) and Lam Research (down 12%). Meta's higher expense outlook and Lam Research's weak guidance sparked concerns about AI spending. Other semiconductor stocks also dropped significantly. The index is now 5.8% below its October record high.

Lam Research (LRCX) shares fell 12% after its earnings release, citing supply constraints and a decline in China revenue for the next quarter, according to management.

Lam Research reported 2026 revenue of $8.22B, up 54.4% YoY, and net income of $2.75B, up 75.5% YoY. Diluted EPS rose 76.6% to $2.19. Sequential revenue growth of 22% was driven by strong demand in foundry and memory equipment. Systems revenue increased 35% sequentially, while customer support revenue grew modestly. Management highlighted AI-driven spending as an opportunity but noted trade restrictions and industry volatility as risks.

Meta Platforms and other AI-focused companies saw significant stock declines after Meta announced plans to raise funds through new shares to support AI spending. Meta's shares fell 8%, its largest drop since July, while Nvidia and SpaceX also declined. The Nasdaq Composite was on track for its largest decline in four months. Concerns over the return on investment and rising costs of AI infrastructure are weighing on investor sentiment.

Lam Research (LRCX) fell 9.44% to $236.19 on October 22 after reporting September-quarter revenue of $8.22B, up 22% YoY, and meeting expectations with its outlook. Despite record sales and growth, investors remain concerned about valuation and future growth.

Lam Research increased its revenue target for Aether to $2.5B by 2030. The company forecasts wafer-fab equipment spending to exceed $200B in 2027, driven by DRAM and NAND demand. Clean-room capacity and supply-chain constraints pose risks.