AI-Driven Foundry Demand Likely to Boost LRCX's Systems Revenues in Q2

Lam Research Corporation LRCX is scheduled to release its second-quarter fiscal 2026 earnings on Jan. 28. The chip-making tool provider looks well-positioned for another strong quarter, supported by the surging demand for artificial intelligence (AI) chips and its leadership in wafer fabrication equipment and services.

Click here to know how LRCX’s overall second-quarter results are likely to be.

Growing Chip Demand Boosts LRCX’s Systems Revenues

Lam Research’s Systems segment revenues are likely to have registered strong growth in the second quarter, mainly driven by the strength of its foundry business. Its foundry business continues to benefit from rising investments in advanced chip manufacturing, especially for AI and high-performance computing applications. The company’s strong position in etch and deposition tools, which are critical for smaller and more complex transistor designs, has made it a key supplier to major foundries.

Lam Research’s new technologies, such as the Aether dry resist extreme ultraviolet (EUV) patterning solution and the Akara conductor etch system, have been gaining traction with leading-edge chipmakers. These advanced technologies improve pattern precision and process efficiency, which is essential for the ongoing transition to next-generation nodes like gate-all-around transistors.

We believe that the company’s sustained focus on expanding technological leadership, along with the rising demand for AI and advanced computing chips, has strengthened its foundry business. This is likely to have boosted Lam Research’s Systems revenues in the to-be-reported quarter.

Our model estimates second-quarter Systems’ revenues to be $3.41 billion, indicating a year-over-year increase of 29.7%.

LRCX’s Zacks Rank and Other Stocks to Consider

Currently, Lam Research sports a Zacks Rank #1 (Strong Buy).

Analog Devices ADI, Amphenol APH and Micron Technology MU are some other top-ranked stocks that investors can consider in the Zacks Computer and Technology sector. Analog Devices, Amphenol and Micron Technology sport a Zacks Rank #1 each at present. You can see the complete list of today’s Zacks #1 Rank stocks here.

The Zacks Consensus Estimate for Analog Devices’ fiscal 2026 earnings is pegged at $10.01 per share, revised upward by 22 cents over the past 30 days and suggests a year-over-year increase of 28.5%. Analog Devices’ shares have rallied 41.9% over the past year.

The Zacks Consensus Estimate for Amphenol’s 2026 earnings has been revised upward by 5 cents over the past seven days to $4.21 per share, calling for an increase of 27.2% year over year. Amphenol shares have surged 123.8% in the trailing 12 months.

The Zacks Consensus Estimate for Micron Technology’s fiscal 2026 earnings has moved northward by 13 cents in the past seven days to $33.08 per share, implying 297.5% year-over-year growth. Micron Technology shares have soared 338.7% over the past year.

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This article originally published on Zacks Investment Research (zacks.com).

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