Revenue reached a record $8.22 billion in the September quarter and the company forecast $8.60 billion, plus or minus $400 million, for December. Shares were indicated down about 8% before the open, with other chip-equipment makers lower too.
Lam Research reported the best quarter in its history on Wednesday. Its shares were pointing sharply lower.
Revenue for the quarter ended Sept. 27 rose 22% from the June quarter and 54% from a year earlier to $8.22 billion. Non-GAAP earnings were $2.20 a share, compared with the $2.18 FMP consensus, and non-GAAP gross margin edged up to 52.4% from 52.0%. Operating cash flow more than doubled from the prior quarter to $3.50 billion. The company raised its quarterly dividend to $0.33 from $0.26.
Chief Executive Tim Archer said AI was driving higher semiconductor demand and greater device complexity.
The guidance range
For the December quarter, Lam forecast revenue of $8.60 billion, plus or minus $400 million, and earnings of $2.33 a share, plus or minus 15 cents. The midpoint is above the Investing.com consensus of about $8.54 billion.
The width of the range is what stands out. At the bottom, $8.20 billion, revenue would slip slightly from the quarter just reported. The midpoint implies sequential growth of about 4.6%, after 22% in the September quarter. A company whose shares have been priced for continued acceleration gave a range that includes a flat quarter.
Where the revenue comes from
China accounted for 35% of revenue, the largest single region, followed by Korea at 20% and Taiwan at 18%. The United States was 8%. That mix leaves Lam exposed both to Chinese demand and to the Korean memory makers whose shares fell sharply in Asia on Thursday.
The reaction
Lam closed Wednesday at $260.81, down 1%. It was indicated at about $239.79 at 5:33 a.m. Eastern, down about 8.1%. Applied Materials was down about 4.9% and KLA about 4.1% in early indications, so part of the move was sector-wide, in a session when AI-linked stocks fell across Asia and in U.S. futures.
Two readings
The bullish reading: a record quarter, margins holding above 52%, a guidance midpoint above consensus and a 27% dividend increase are not the profile of a company facing a downturn.
The cautious reading: after a 54% annual growth rate, a guide that runs from a small decline to about 10% growth signals that the steepest part of the cycle may be over, and the stock's valuation had little room for a slowdown.
What to watch
Memory makers' capital spending plans for 2027, China's share of Lam's revenue in coming quarters and whether peers reporting later this month describe the same slowing in sequential growth.