Strong Foundry Demand Likely to Power LRCX's Systems Sales in Q3

Lam Research CorporationLRCX is scheduled to release its third-quarter fiscal 2026 earnings on April 22. The company 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 third-quarter results are likely to be.

Surging Chip Demand Drives LRCX’s Systems Revenues

Lam Research’s Systems segment revenues are likely to have witnessed strong growth in the third 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, are 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.

The Zacks Consensus Estimate for third-quarter systems revenues is pegged at $3.82 billion, implying year-over-year growth of 25.8%, underscoring Lam Research’s continued strength in the evolving tech landscape.

LRCX’s Zacks Rank and Stocks to Consider

Currently, Lam Research carries a Zacks Rank #3 (Hold).

Some better-ranked stocks worth considering in the broader Zacks Computer and Technology sector are Micron TechnologyMU, BroadcomAVGO and NVIDIANVDA. Micron Technology and Broadcom each sport a Zacks Rank #1 (Strong Buy) at present, while NVIDIA carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

The Zacks Consensus Estimate for Micron Technology’s fiscal 2026 earnings has been revised upward by 51.1% to $58.36 per share in the past 30 days, suggesting an increase of 604% from fiscal 2025’s reported figure. Micron Technology shares have surged 59.5% year to date (YTD).

The Zacks Consensus Estimate for Broadcom’s fiscal 2026 earnings has moved northward by a penny to $11.45 per share over the past seven days and calls for a year-over-year jump of 67.9%. Broadcom shares have soared 17.5% YTD.

The Zacks Consensus Estimate for NVIDIA’s fiscal 2027 earnings has moved upward by 3 cents to $8.06 per share in the past seven days, implying a year-over-year improvement of approximately 69%. NVIDIA shares have risen 8.2% YTD.

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

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