Lam Research reports Q2 earnings in line with expectations, benefiting from sustained AI fab buildout and advanced packaging demand.
Semiconductor equipment maker Lam Research (NASDAQ:LRCX) met Wall Street's revenue expectations in Q2 CY2026, reporting sales of $6.72 billion, up 30% year-on-year. The company's non-GAAP earnings per share of $1.82 came in 8.1% above analysts' consensus estimates. For the coming quarter, Lam Research is guiding for revenue of approximately $8.1 billion, which sits 13.6% above analyst estimates.
"Lam delivered record revenue, operating margin and earnings per share in the June quarter as AI-driven demand continues to reshape the semiconductor industry," said Tim Archer, Lam Research's President and Chief Executive Officer.
Founded in 1980 by David Lam, the pioneering developer of semiconductor etching technology, Lam Research is one of the leading providers of wafer fabrication equipment used in semiconductor manufacturing.
Over the past five years, Lam Research has demonstrated solid long-term growth, with sales expanding at a 9.7% compounded annual growth rate—slightly above the semiconductor industry average and reflecting strong customer demand for its offerings. However, the company's more recent performance tells an even stronger story. Over the last two years, annualized revenue growth accelerated to 24.8%, suggesting that demand has picked up notably in line with AI-driven semiconductor cycles.
This quarter's 30% year-on-year revenue growth marks the ninth consecutive quarter of expansion, indicating a robust industry upcycle that typically runs eight to ten quarters. Management is guiding for a 52.1% year-on-year increase in sales in the next quarter. Looking further ahead, sell-side analysts project revenue growth of 33.8% over the next twelve months, an improvement from the prior two years, suggesting that Lam Research's newer products and services are driving stronger top-line performance at scale.
Days Inventory Outstanding (DIO), a key metric for chipmakers reflecting capital intensity and supply-demand cyclicality, came in at 120 this quarter—45 days below the company's five-year average. This indicates healthy inventory levels with no signs of excessive buildup, consistent with a tight supply environment where pricing power remains intact.
The stock moved up 8% to $272.07 immediately following the earnings announcement. While the quarter was encouraging, investors should consider this result as one piece of a longer-term assessment of business quality and valuation.