Memory capex cycle accelerates as Lam Research posts $23.2 billion year
Against the backdrop of an AI-driven supply squeeze that has pushed DRAM and NAND flash prices up 500% in a single year, according to Tom's Hardware, Lam Research (NASDAQ: LRCX) is drawing fresh attention as a direct equipment…
Key takeaways
- Lam Research reported fiscal 2026 revenue of $23.2 billion, a 26% year-over-year increase, with earnings per share rising 39% to $5.76.
- Memory equipment sales account for 46% of Lam's revenue, tying it to a projected surge in memory-manufacturer capex from $58 billion in 2025 to $97 billion in 2026 and $146 billion in 2027.
- DRAM and NAND flash prices have risen 500% in a single year amid an AI-driven supply squeeze, according to Tom's Hardware.
- Lam guided to current-quarter revenue of $8.1 billion (up 52%) and EPS of $2.15 (up 71%), while its stock has gained 76% in 2026 but fallen 30% from its June 30 52-week high.
- Deloitte estimates new memory supply is unlikely to arrive before 2029 or 2030, pointing to equipment demand extending well beyond a single fiscal year.
Against the backdrop of an AI-driven supply squeeze that has pushed DRAM and NAND flash prices up 500% in a single year, according to Tom's Hardware, Lam Research (NASDAQ: LRCX) is drawing fresh attention as a direct equipment supplier to the manufacturers scrambling to close the gap. The company reported fiscal 2026 revenue of $23.2 billion, a 26% year-over-year increase, with earnings per share rising 39% to $5.76.
The capex cycle behind the numbers
Forty-six percent of Lam's revenue comes from memory equipment sales, placing its order book squarely inside what Deloitte projects will be one of the industry's largest spending cycles. Deloitte estimates that combined capital expenditure by memory manufacturers could climb from $58 billion in 2025 to $97 billion this year and $146 billion in 2027. Broader semiconductor industry capex could reach $198 billion in 2026 and $260 billion in 2027, by the same projections.
The case for Lam rests on duration. Building new memory fabrication plants takes years, and Deloitte estimates new supply is unlikely to arrive before 2029 or 2030. Deloitte also projects that DRAM prices could jump four times in 2026 alone. That timeline points to equipment orders extending well beyond a single fiscal year, with Micron Technology and Sandisk continuing to invest throughout. Lam sits at the center of that demand environment, collecting roughly half its revenue from the segment under the most pressure to expand.
Lam's own guidance calls for current-quarter revenue of $8.1 billion, a 52% increase from a year earlier, with earnings per share of $2.15, up 71%. Analysts project EPS of $9.46 in fiscal 2027, a 62% rise. The stock has gained 76% in 2026 but has retreated 30% from the 52-week high reached June 30.
One analysis, applying a 27% long-run earnings growth rate and a 30-times earnings multiple four years out, arrives at a potential stock price of $581, roughly 93% above current levels. Those are the analyst's own assumptions, not company guidance. The rate environment sets the ceiling on that math. Deloitte projects semiconductor industry capex at $260 billion in 2027, a figure that holds only if the cost of capital stays manageable for the manufacturers placing the equipment orders.
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