Lam Research (NASDAQ:LRCX) Reports Q2 In Line With Expectations, Stock Soars
Semiconductor equipment maker Lam Research (NASDAQ:LRCX) met Wall Street’s revenue expectations in Q2 CY2026, with sales up 30% year on year to $6.72 billion. The company expects next quarter’s revenue to be around $8.1 billion, coming in 13.6% above analysts’ estimates. Its non-GAAP profit of $1.82 per share was 8.1% above analysts’ consensus estimates.
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Lam Research (LRCX) Q2 CY2026 Highlights:
- Revenue: $6.72 billion vs analyst estimates of $6.69 billion (30% year-on-year growth, in line)
- Adjusted EPS: $1.82 vs analyst estimates of $1.68 (8.1% beat)
- Adjusted Operating Income: $2.58 billion vs analyst estimates of $2.44 billion (38.4% margin, 5.8% beat)
- Revenue Guidance for Q3 CY2026 is $8.1 billion at the midpoint, above analyst estimates of $7.13 billion
- Adjusted EPS guidance for Q3 CY2026 is $2.15 at the midpoint, above analyst estimates of $1.83
- Operating Margin: 37.4%, up from 33.7% in the same quarter last year
- Free Cash Flow Margin: 18.9%, down from 46.1% in the same quarter last year
- Inventory Days Outstanding: 120, down from 124 in the previous quarter
- Market Capitalization: $337.2 billion
"Lam delivered record revenue, operating margin and earnings per share in the June quarter as AI-driven demand continues to reshape the semiconductor industry," said Tim Archer, Lam Research's President and Chief Executive Officer.
Company Overview
Founded in 1980 by David Lam, the man who pioneered semiconductor etching technology, Lam Research (NASDAQ:LRCX) is one of the leading providers of wafer fabrication equipment used to make semiconductors.
Revenue Growth
Reviewing a company’s long-term sales performance reveals insights into its quality. Any business can put up a good quarter or two, but many enduring ones grow for years. Luckily, Lam Research’s sales grew at a decent 9.7% compounded annual growth rate over the last five years. Its growth was slightly above the average semiconductor company and shows its offerings resonate with customers. Semiconductors are a cyclical industry, and long-term investors should be prepared for periods of high growth followed by periods of revenue contractions (which can sometimes offer opportune times to buy).
We at StockStory place the most emphasis on long-term growth, but within semiconductors, a half-decade historical view may miss new demand cycles or industry trends like AI. Lam Research’s annualized revenue growth of 24.8% over the last two years is above its five-year trend, suggesting its demand recently accelerated. 
This quarter, Lam Research’s year-on-year revenue growth of 30% was excellent, and its $6.72 billion of revenue was in line with Wall Street’s estimates. Beyond meeting estimates, this marks 9 straight quarters of growth, showing that the current upcycle has had a good run - a typical upcycle usually lasts 8-10 quarters. Company management is currently guiding for a 52.1% year-on-year increase in sales next quarter.
Looking further ahead, sell-side analysts expect revenue to grow 33.8% over the next 12 months, an improvement versus the last two years. This projection is particularly healthy for a company of its scale and implies its newer products and services will spur better top-line performance.
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Product Demand & Outstanding Inventory
Days Inventory Outstanding (DIO) is an important metric for chipmakers, as it reflects a business’s capital intensity and the cyclical nature of semiconductor supply and demand. In a tight supply environment, inventories tend to be stable, allowing chipmakers to exert pricing power. Steadily increasing DIO can be a warning sign that demand is weak, and if inventories continue to rise, the company may have to downsize production.
This quarter, Lam Research’s DIO came in at 120, which is 45 days below its five-year average. At the moment, these numbers show no indication of an excessive inventory buildup.
Key Takeaways from Lam Research’s Q2 Results
It was good to see Lam Research beat analysts’ EPS expectations this quarter. We were also glad its revenue guidance for next quarter trumped Wall Street’s estimates. Zooming out, we think this was a good print with some key areas of upside. The stock traded up 8% to $272.07 immediately following the results.
Lam Research had an encouraging quarter, but one earnings result doesn’t necessarily make the stock a buy. Let’s see if this is a good investment. We think that the latest quarter is only one piece of the longer-term business quality puzzle. Quality, when combined with valuation, can help determine if the stock is a buy. We cover that in our actionable full research report which you can read here (it’s free).