KEY STATS
- Current price: ~$266
- Q3 FY2026 revenue: $5.84B, up 24% YoY, up 9% QoQ
- Q3 FY2026 non-GAAP EPS: $1.47 (record; above high end of guidance)
- Q3 FY2026 gross margin: 49.9%
- Q3 FY2026 operating margin: 35%
- Q4 FY2026 revenue guidance: $6.6B (+/- $400M)
- Q4 FY2026 non-GAAP EPS guidance: $1.65 (+/- $0.15) (record forecast)
- TIKR model price target: $349
- Implied upside: ~31%
Q3 2026 Earnings Breakdown – LRCX Stock
Lam Research stock (LRCX) posted record revenue of $5.84B in the March 2026 quarter, up 24% year-over-year, with non-GAAP EPS of $1.47 beating the high end of the company’s own guided range.
The Customer Support Business Group crossed a milestone, generating over $2.1B in quarterly revenue for the first time, up 25% year-over-year, according to Doug Bettinger, Executive Vice President and CFO on the Q3 2026 earnings call.
Foundry accounted for 54% of systems revenue, roughly flat sequentially in dollar terms but up 35% year-over-year, with strength concentrated at the leading edge and in advanced packaging.
Memory was 39% of systems revenue, up from 34% in December, led by record DRAM revenue at 27% of systems revenue as high-bandwidth memory investments and the transition to 1C node devices accelerated.
Nonvolatile memory contributed 12% of systems revenue, up slightly from 11%, with management flagging accelerating upgrade activity tied to AI data center demand for higher-capacity QLC NAND devices.
CEO Tim Archer raised the company’s 2026 WFE forecast to $140B, up from the $135B outlook issued in January, citing higher spending projections across all device segments and noting a bias toward further upside.
Guidance for the June 2026 quarter calls for revenue of $6.6B (plus or minus $400M) and record non-GAAP EPS of $1.65 (plus or minus $0.15), representing sequential revenue growth of roughly 13%.
Capital return in the quarter totaled approximately $800M in share buybacks, $326M in dividends, and the retirement of $750M in unsecured notes, with the company returning 139% of free cash flow.
Lam Research Stock: What the Income Statement Shows
The March 2026 quarter extends a margin expansion arc that has been building steadily across the prior eight quarters, with both gross and operating margins moving higher as revenue scale overtakes cost growth.
Gross margin came in at 49.9% in the March quarter, at the high end of guidance, reflecting favorable customer and product mix as well as improved factory efficiencies, according to Bettinger on the Q3 2026 earnings call.
The income statement shows gross margin moving from 47.9% in the March 2024 quarter to 50.4% in September 2025 before settling at 49.6% in December 2025, establishing a durable floor above 49%.
Operating margin for the March quarter was 35%, also at the high end of guidance and according to Bettinger on the Q3 earnings call, compared to 33.9% in the December 2025 quarter visible on the income statement and 28.7% two years prior.
Total operating expenses rose to $866M from $827M in December, driven by seasonal employee costs and headcount additions, though operating leverage remained intact given the revenue step-up.
June quarter guidance calls for gross margin of approximately 50.5% (plus or minus 1 point) and operating margin of 36.5% (plus or minus 1 point), both above Lam Research stock’s previously stated long-term model targets.
Lam Research Stock: Valuation Model Take
The TIKR model places Lam Research stock at a price target of $348.74, implying roughly 31% upside from the April 22 close of approximately $266.
The mid-case assumptions call for a revenue CAGR of approximately 9.9% and a net income margin of 28.2%, parameters that this quarter’s 24% revenue growth and near-50% gross margin make look conservative rather than demanding.
The March results reduce the execution risk embedded in that model: CSBG crossing $2B, EPS exceeding the high end of guidance, and the WFE outlook revision to $140B all move probability toward the mid and high scenarios.
The investment case for Lam Research stock is measurably stronger after this report than heading in, with margin expansion tracking above the long-term model and the June quarter set up for another record EPS print.
The question this report leaves open: can Lam’s gross margin hold above 50% as China revenue declines and customer mix shifts, or does the second half of 2026 give back the margin gains the first half established?
What Has to Go Right
- Gross margin sustains at or above the 50.5% June guidance level, validating that factory efficiency gains from the Malaysia proximity strategy are structural and not dependent on the current favorable mix
- NAND conversion spending accelerates as forecast, with the majority of the $40B upgrade cycle front-loaded before end of calendar 2027, driving outsized etch and deposition systems revenue for Lam
- CSBG sustains near $2.1B per quarter through the rest of 2026 as equipment intelligence and Dextro cobot adoption deepen, layering in a higher-margin recurring revenue component on top of spares and services
- Lam Research stock’s SAM expands to slightly above the mid-30s percent of WFE in 2026 on track toward the stated high-30s target, supporting the 9.9% revenue CAGR embedded in the TIKR mid-case
What Could Still Go Wrong
WFE growth in 2026 remains constrained by clean room availability, meaning the $140B forecast could prove a ceiling if new fab buildouts slip, limiting Lam Research stock’s second-half revenue growth below what June quarter momentum currently implies
China revenue, currently 34% of total, is guided to decline sequentially in the June quarter, and any further export restrictions would compress a segment that has been a consistent revenue contributor across the past several quarters
Customer down payments are at the lowest level in nearly four years, per Bettinger on the Q3 call, reflecting a shift in leading customers’ profile and reducing near-term revenue predictability compared to prior cycles
NAND upgrade pull-forward has sharpened near-term expectations; if the 256-layer conversion ramp slips or greenfield investments are delayed beyond 2027, NAND systems revenue could fall short of the acceleration already embedded in guidance
Should You Invest in Lam Research Corporation?
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