Lam Research Shares Slide Nearly 10% Despite Record Quarter

what happened

Shares of Lam Research, a maker of wafer-fabrication equipment, fell 9.44% to $236.19 around 10:45 a.m. ET on October 22, following the release of its September-quarter numbers. Gurufocus.com, citing Investor's Business Daily, reported that the results narrowly beat analyst forecasts, while the current-quarter outlook landed in line with them.

Quarterly revenue reached $8.22 billion, a 22% rise from June. GAAP gross margin came in at 52.3% and operating margin at 40.0%, with net income of $2.75 billion, or $2.19 per diluted share. Management pointed to demand for AI-related chips and growing chip complexity as the main drivers.

For the December quarter, Lam expects revenue of $8.60 billion, give or take $400 million, and a gross margin near 52.5% at the midpoint. The GF Value estimate of $160.71 per share sits below the current price, which still trades 46.97% above that figure.

why it matters

The reaction suggests that in semiconductor equipment, strong results may not be enough when expectations are already high. Investors now want evidence that demand can keep turning into revenue growth while margins hold, and the debate over whether the valuation is justified is likely to stay in focus.

market impact

Semiconductor equipment: high expectations weigh on Lam Research and peers as valuations stay stretched

tags

instruments