Why Lam Research (LRCX) Shares Are Getting Obliterated Today

What Happened?

Shares of semiconductor equipment maker Lam Research (NASDAQ:LRCX) fell 5.3% in the afternoon session after investors grew concerned about a slowdown in the chip industry following a weak forecast from peer company Texas Instruments. 

Texas Instruments, a major analog chip maker, gave a lackluster forecast, adding to worries that the semiconductor industry's recovery was sputtering. The company projected fourth-quarter revenue and profit that fell short of analysts' average estimates. This negative sentiment spread across the sector, with the Philadelphia Semiconductor Index declining 0.66%. The downturn in U.S. tech stocks prompted selling in overseas markets as well, particularly among large semiconductor firms. The broad-based selling occurred ahead of Lam Research's own first-quarter earnings results, which were scheduled for release after the closing bell.

The stock market overreacts to news, and big price drops can present good opportunities to buy high-quality stocks. Is now the time to buy Lam Research? Access our full analysis report here.

What Is The Market Telling Us

Lam Research’s shares are very volatile and have had 21 moves greater than 5% over the last year. In that context, today’s move indicates the market considers this news meaningful but not something that would fundamentally change its perception of the business.

The previous big move we wrote about was 7 days ago when the stock gained 2.7% on the news that the broader semiconductor sector rallied as Dutch chipmaking equipment giant ASML Holding reported stronger-than-expected orders, boosting investor confidence. 

ASML, a key player in the industry, posted impressive third-quarter orders for its chip-making equipment, fueled by continued high demand for advanced semiconductors used in artificial intelligence. This positive news from a major peer lifted sentiment for other companies in the sector, including Lam Research, on expectations of similar industry-wide strength. Further adding to the positive mood, Rothschild & Co Redburn raised its price target on Lam Research's stock to $150 from $140, while maintaining a "Buy" rating. Broader market optimism also played a role, as hopes for a U.S. Federal Reserve rate-cut cycle helped lift chip stocks.

Lam Research is up 91.2% since the beginning of the year, and at $138.62 per share, it is trading close to its 52-week high of $149.15 from October 2025. Investors who bought $1,000 worth of Lam Research’s shares 5 years ago would now be looking at an investment worth $3,869.

Today’s young investors won’t have read the timeless lessons in Gorilla Game: Picking Winners In High Technology because it was written more than 20 years ago when Microsoft and Apple were first establishing their supremacy. But if we apply the same principles, then enterprise software stocks leveraging their own generative AI capabilities may well be the Gorillas of the future. So, in that spirit, we are excited to present our Special Free Report on a profitable, fast-growing enterprise software stock that is already riding the automation wave and looking to catch the generative AI next.