Morgan Stanley Raises Lam Research (LRCX) Valuation on Strong DRAM Investment Forecast

Lam Research Corporation (NASDAQ:LRCX) is included among the 13 Best Income Stocks with Highest Upside Potential.

On February 25, Morgan Stanley analyst Shane Brett raised the firm’s price recommendation on Lam Research Corporation (NASDAQ:LRCX) to $254 from $244. The firm reiterated an Equal Weight rating on the shares. The firm also increased its wafer fab equipment market growth forecasts for 2026 and 2027 to 23% and 27%, up from prior estimates of 13% and 19%. The analyst said the upward revision reflects stronger expected spending on DRAM memory.

During the fiscal Q2 2026 earnings call, CEO Timothy Archer said Lam Research finished calendar year 2025 with revenue above the midpoint of its guidance range. He added that gross margins, operating margins, and earnings per share all exceeded the high end of the company’s expectations. He said the results reflected strong execution across the business. He highlighted the company’s leadership in deposition and etch technologies. These technologies play a key role in enabling semiconductor advancements tied to AI. He explained that they support important transitions, including gate-all-around transistor designs, backside power delivery, and 3D advanced packaging. He also said the company delivered record revenue of more than $20 billion and increased its share of the wafer fabrication equipment market. Its served available market share rose into the mid-30% range.

Archer also discussed the company’s Akara etch system. He said the installed base doubled over the past year, reflecting strong adoption. The system has seen growing use among advanced DRAM, foundry, and logic customers. He said adoption is expected to double again as customers move toward next-generation gate-all-around technologies.

He also noted progress in the Customer Support Business Group. The installed base exceeded 100,000 chambers. He said revenue from this segment grew faster than the increase in installed units, indicating higher service demand and improved monetization of the company’s expanding equipment base.

Lam Research Corporation (NASDAQ:LRCX) supplies wafer fabrication equipment and services to the semiconductor industry. The company designs, manufactures, markets, refurbishes, and services equipment used in the production of integrated circuits.

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