Stifel elevated its price target on Lam Research (LRCX) to $280.00 from $250.00 and reiterated a Buy rating after the company released fiscal second-quarter results that beat expectations. The new target sits below some of the most optimistic analyst forecasts, while Lam shares were trading at $238.94 and remained close to their 52-week high of $243.99.
The semiconductor equipment maker reported December-quarter results and issued March-quarter guidance that outperformed both Stifel’s internal models and consensus estimates. Lam recorded revenue of $20.56 billion and delivered 26.85% growth over the trailing twelve months, underscoring a period of strong financial momentum.
Looking ahead, Lam Research outlined an industry WFE spending forecast of $135 billion for calendar year 2026, which represents more than 20% year-over-year growth. Management noted that revenue will likely be skewed toward the second half of the year because fab cleanroom availability is constrained, limiting near-term capacity for some customers.
Stifel had previously modeled a WFE expansion closer to 15% year-over-year. The firm said it now sees greater upside driven by clearer visibility into demand for AI infrastructure and by leading memory and foundry customers’ ability to secure additional cleanroom space, enabling higher WFE potential.
Market metrics in the near term reflect elevated investor expectations: the stock is trading at a price-to-earnings ratio of 53.51 and a PEG ratio of 1.11, indicating a premium valuation relative to projected near-term earnings growth.
Stifel pointed to the company’s systems performance in calendar 2025, when Lam’s system revenue expanded at more than twice the rate of industry WFE growth. On that basis, Stifel continues to expect Lam to outperform the broader market in 2026 and has accelerated its internal timing, modeling the company to reach its calendar 2028 target financial framework during 2026.
In addition to Stifel’s action, several other brokerages adjusted their outlooks after Lam’s reports and guidance:
- Cantor Fitzgerald increased its target to $320, citing robust revenue performance relative to the broader WFE industry.
- Bernstein raised its price target to $275, pointing to faster-than-anticipated growth and the prospect of reaching long-term targets ahead of schedule.
- TD Cowen lifted its target to $290 on the back of an optimistic WFE market outlook for 2026.
- JPMorgan set a $300 price target, highlighting Lam’s ability to meet customer demand and maintain revenue expectations from China.
- KeyBanc Capital Markets maintained a Sector Weight rating while acknowledging the company’s strong earnings and constructive guidance.
Lam’s guidance for the upcoming quarter included projected revenue of $5.7 billion and earnings per share of $1.35, both of which topped consensus expectations. These results and forward-looking figures have drawn significant analyst attention and prompted the recent round of target adjustments.
From a market-capitalization perspective, Lam Research is a substantial player in semiconductor equipment, with a reported market value of $299.64 billion. Its scale positions it to capture a meaningful share of any incremental WFE spending that materializes as customers expand capacity for AI and memory production.
What this means for investors
Analyst target increases suggest a growing acceptance among sell-side firms that industry conditions and Lam’s order flow are stronger than previously modeled. The combination of above-consensus quarterly outcomes, elevated WFE forecasts for 2026, and the expectation that management can convert demand into revenue despite cleanroom constraints underpins the more bullish stance across the brokerage community.
While valuation metrics show investors are paying a premium for near-term earnings growth, the rerating from multiple firms reflects improved visibility into AI-driven demand and customer capacity expansion plans.