Lam Research Surpasses Expectations with Strong Q2 Results, Driven by AI Chip Demand

Lam Research forecasts upbeat quarterly revenue on strong chip equipment demand

July 30 (Reuters) - Lam Research (LRCX.O), opens new tab forecast first-quarter revenue above Wall Street expectations on Wednesday, driven by strong demand for its specialized chip-making equipment used in developing advanced artificial intelligence processors, sending its shares up over 4% in extended trading. Demand for Lam's equipment has been bolstered by a surge in orders for artificial intelligence semiconductors, with chip designers striving to develop advanced processors to meet growing computing needs. However, tariffs imposed by U.S. President Donald Trump have introduced volatility into the chip industry, prompting firms to reassess costs and seek clarity on the potential impact of the duties. Dutch firm ASML (ASML.AS), opens new tab, the world's biggest supplier of computer chip-making equipment, warned earlier this month that it may not achieve revenue growth in 2026. Lam forecast first-quarter revenue of $5.20 billion, plus or minus $300 million, compared with estimates of $4.63 billion, according to data compiled by LSEG. It forecast quarterly adjusted earnings per share of $1.20, plus or minus 10 cents, while analysts expect $1 per share. The company reported revenue of $5.17 billion for the quarter ended June 29, beating estimates of $5.01 billion. Lam reported quarterly earnings per share of $1.35, compared with a profit of 78 cents per share, a year ago. Reporting by Zaheer Kachwala in Bengaluru; Editing by Mohammed Safi Shamsi Our Standards: The Thomson Reuters Trust Principles., opens new tab

Lam Research (LRCX) Q2 Revenue Jumps 34% | The Motley Fool

Lam Research (LRCX -4.67%), a leading provider of wafer fabrication equipment used in semiconductor manufacturing, reported its earnings for the quarter ended June 29, 2025, on July 30, 2025. The company significantly outperformed, sharply beating Wall Street expectations across all major metrics for Q2 FY2025 (non-GAAP). Revenue reached $5.17 billion, surpassing the non-GAAP analyst estimate of $4.32 billion for Q2 FY2025, while non-GAAP earnings per share (EPS) reached $1.33 for Q4 fiscal year 2025, well above the $0.88 forecast. Overall, the quarter was marked by robust demand for advanced systems tools, higher profitability, and a continued focus on technology leadership, though management remained cautious about future demand visibility due to regulatory and geopolitical factors. Source: Analyst estimates provided by FactSet. Management expectations based on management's guidance, as provided in Q1 2025 earnings report. Lam Research is a core supplier of the specialized equipment used to make microchips, specifically technologies for deposition, etch, and cleaning steps. Its machines are vital to producing the advanced semiconductors found in everything from smartphones to artificial intelligence servers. The company's main customers include major chipmakers around the world, who depend on Lam's tools for next-generation chip fabrication. The company has focused sharply on innovation through high research and development (R&D) investments and on operational flexibility. Success depends on being able to develop critical technologies ahead of competitors, maintain deep customer partnerships with leading chipmakers, and manage the risks associated with global manufacturing and regulation. Lam's strategy centers on staying ahead in technology and ensuring dependable supply and service for customers operating on the leading edge of semiconductor advances. Revenue rose 33.6% in the June 2025 quarter compared to June 2024. These results were made possible by robust demand for Lam's most advanced systems tools, especially among foundry and memory manufacturers upgrading to newer semiconductor process nodes. Management highlighted a notable surge in advanced-node activity in Taiwan. China also contributed significantly, accounting for 35% of total revenue in Q4 FY2025, up from 31% in the previous quarter (Q3 fiscal year 2025). Operationally, the company's gross margin rose to 50.3% (non-GAAP) for Q2 FY2025, reducing costs and increasing delivery flexibility. In terms of product portfolio, Lam's Stryker Spark ALD and Altus Halo -- advanced deposition systems used to build intricate semiconductor layers -- saw increased adoption, particularly in 3D NAND memory. The company's ACARA conductor etch system, which is used to precisely remove material during chip production, achieved leading positions in DRAM and logic markets. These tool wins resulted from ongoing technology investment. Lam also advanced its digital services, including Simulator3D, a virtual fabrication tool using artificial intelligence and machine learning, and expanded its offerings in intelligent equipment support for advanced manufacturing. The Customer Support Business Group (CSBG), which accounts for parts, services, and upgrades, saw less growth at 1.9% year over year. Management noted robust demand for upgrades, especially within NAND during Q3 fiscal year 2025, but indicated that growth in support revenues was limited by restrictions on service in China and declines in the Reliant specialty tools segment for Q1 FY2025 (non-GAAP). Customer upgrades and spares for older equipment remained healthy, but the company signaled that these revenues could flatten if upgrade cycles or customer expansion slow. Regarding capital returns, the quarterly dividend was increased by 15% year over year to $0.23 per share for Q4 fiscal year 2025, continuing Lam's track record of returning value to shareholders. Shares outstanding also declined slightly reflecting ongoing share repurchases, which contribute to per-share earnings growth. It forecasts revenue of $5.20 billion, plus or minus $300 million, for the quarter ending September 28, 2025. Gross margin (non-GAAP) is expected to be around 49.4%, with a possible range of plus or minus 1 percentage point for the quarter ending June 29, 2025. This guidance remains roughly in line with the strong Q2 FY2025 results but reflects expectations for lumpier tool shipments and possible impacts from recently announced trade restrictions, particularly in China. Lam's outlook remains closely tied to global demand for advanced semiconductors and the timing of customer projects. The company's heavy exposure to China is both a growth driver and a risk, given ongoing changes in U.S. export regulations targeting Chinese domestic chipmakers. Management indicated that China's share of revenue is expected to decline year over year. Investors will want to monitor how trade policy develops, whether customer support business can regain momentum, and whether margin improvements prove sustainable if geographic or product mix shifts further. The quarterly dividend was increased by 15% year over year to $0.23 per share for Q2 fiscal year 2025.