Morgan Stanley Downgrades Lam Research (LRCX) to Underweight with a $92 PT

Lam Research Corporation (NASDAQ:LRCX) is one of the best QQQ stocks to buy right now. On September 2, Morgan Stanley analyst Shane Brett downgraded Lam Research Corporation to Underweight from Equal Weight with a price target of $92, down from $94. Lam Research Corporation regained market share, led by NAND, China, and share gains at TSM.

Earlier in FQ4 2025, the company’s revenue for the quarter was $5.17 billion, which was a 9.6% increase from the previous quarter. The company also reported strong profitability, with a non-GAAP gross margin of 50.3%, up from 49.0% in the previous quarter. The company’s financial position also strengthened, with cash reserves increasing to $6.4 billion.

Deferred revenue grew to $2.681 billion, indicating strong future sales potential. The company’s non-GAAP operating income as a percentage of revenue rose to 34.4%. Lam Research also raised its forecast for the wafer fabrication equipment/WFE market for 2025 to $105 billion, attributing the increase to improved demand from China.

Lam Research Corporation (NASDAQ:LRCX) designs, manufactures, markets, refurbishes, and services semiconductor processing equipment used in the fabrication of ICs in the US, China, Korea, Taiwan, Japan, Southeast Asia, and Europe.

While we acknowledge the potential of LRCX as an investment, we believe certain AI stocks offer greater upside potential and carry less downside risk. If you’re looking for an extremely undervalued AI stock that also stands to benefit significantly from Trump-era tariffs and the onshoring trend, see our free report on the best short-term AI stock.

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Disclosure: None. This article is originally published at Insider Monkey.