Assessing Lam Research (LRCX) Valuation After AI Demand Boost And Citi Large Cap Recommendation
Lam Research (LRCX) is back in focus after its shares hit an all time high, following inclusion in Citi's Large Cap Recommended list for 2026, alongside upbeat commentary on AI driven chip equipment demand.
See our latest analysis for Lam Research.
Those AI driven headlines line up with what the price is already signaling, with a 30 day share price return of 16.61% and 90 day share price return of 31.86%, while the 1 year total shareholder return of 139.49% suggests strong momentum that has been building rather than fading.
If Lam Research’s AI story has caught your eye, it could be worth broadening your watchlist to other chip related names using our high growth tech and AI stocks.
With Lam trading above Citi’s price target and an intrinsic value estimate, yet still posting double digit revenue and net income growth, the key question is whether this reflects froth in the market or a rational pricing of future growth.
Most Popular Narrative: 15% Overvalued
With Lam Research last closing at US$185.06 against a fair value estimate of US$160.30, the most followed narrative sees the share price already ahead of its calculation, and leans heavily on AI driven WFE demand and profitability to justify that stance.
Lam's leadership in new process technologies, such as ALD Moly for metal deposition and advanced packaging solutions (SABRE 3D systems), positions the company to capture an increasing share of spend on next-generation chip manufacturing, leading to market share gains, higher average selling prices, and expanding gross margins over the long term.
Curious what kind of revenue growth, margin profile, and earnings multiple need to hold together for that view to make sense? The narrative pins its fair value on a specific earnings path, a steady but not explosive profit expansion, and a premium P/E that still sits below a broad sector benchmark. The full write up lays out how those moving parts translate into today’s estimate.
Result: Fair Value of $160.30 (OVERVALUED)
Have a read of the narrative in full and understand what's behind the forecasts.
However, that story can crack if geopolitical tensions, especially around China, hit orders or if key customers pull back on wafer fab equipment spending sooner than bulls expect.
Find out about the key risks to this Lam Research narrative.
Build Your Own Lam Research Narrative
If your view of Lam’s future looks different, you can stress test the same data and sketch out your own narrative in minutes, starting with Do it your way.
A great starting point for your Lam Research research is our analysis highlighting 2 key rewards and 1 important warning sign that could impact your investment decision.
Looking for more investment ideas?
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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.
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