5 Must-Read Analyst Questions From Lam Research's Q3 Earnings Call

Lam Research’s third quarter showcased strong execution as the company exceeded Wall Street’s revenue and profitability expectations, driven primarily by heightened demand for semiconductor equipment tied to artificial intelligence (AI) infrastructure and high-bandwidth memory (HBM) investments. CEO Tim Archer emphasized that “growth in total CSBG revenue outpaced the increase in installed base units,” citing robust activity across both spares and services. The quarter also reflected Lam’s ability to deliver advanced technology solutions and maintain solid profitability, with management pointing to favorable customer mix and product innovation as key contributors.

Is now the time to buy LRCX? Find out in our full research report (it’s free for active Edge members).

While we enjoy listening to the management's commentary, our favorite part of earnings calls are the analyst questions. Those are unscripted and can often highlight topics that management teams would rather avoid or topics where the answer is complicated. Here is what has caught our attention.

Our Top 5 Analyst Questions From Lam Research’s Q3 Earnings Call

• C.J. Muse (Cantor Fitzgerald) asked if recent AI infrastructure announcements are translating into actual orders; CEO Tim Archer explained that near-term demand is driven by enterprise SSDs and HBM, while longer-term trends remain an opportunity.
• Tim Arcuri (UBS) questioned what drove the incremental revenue improvement for the next quarter; CFO Doug Bettinger attributed it to slightly stronger WFE, HBM, and overall market strength, partially offset by new China restrictions.
• Vivek Arya (Bank of America Securities) asked how much of the data center investment translates to Lam’s addressable market; Archer clarified that as technology transitions advance, Lam’s share of WFE grows, especially at leading-edge nodes.
• Harlan Sur (JPMorgan) pressed for details on growth in the customer support business group (CSBG) and its margin contribution; Bettinger confirmed that core spares, services, and upgrades are all growing and that CSBG remains accretive to corporate margins.
• Jim Schneider (Goldman Sachs) inquired about the outlook for NAND market acceleration and the balance between upgrades and new tool sales; Archer responded that upgrades are likely to remain the dominant driver through next year, with new capacity additions possible if demand outpaces current expectations.

Catalysts in Upcoming Quarters

In upcoming quarters, the StockStory team will be watching (1) progress on new product adoption, particularly in ALD and advanced patterning for AI and high-bandwidth memory applications, (2) Lam’s ability to offset expected declines in China revenue with growth from global multinationals and advanced packaging, and (3) the pace and scale of NAND upgrade cycles and potential capacity additions. Execution on operational efficiency and margin resilience amid changing customer and geographic mix will also be key areas of focus.

Lam Research currently trades at $157.80, up from $141.40 just before the earnings. In the wake of this quarter, is it a buy or sell? The answer lies in our full research report (it’s free for active Edge members).

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