LRCX -- FQ2 FY2026 Earnings Review
BEAT
Reported Jan 28, 2026 | FQ2 FY2026 (Calendar Q4 2025) |
EPS $1.27 vs. $1.17 consensus (+8.5%) |
Revenue $5.34B vs. $5.23B consensus (+2.1%).
10th consecutive quarter of revenue growth. Record revenue.
Q4 Non-GAAP EPS
$1.27
Beat consensus $1.17 by +8.5%
Q4 Revenue
$5.34B
Beat consensus $5.23B by +2.1%
Non-GAAP Gross Margin
49.7%
Beat high end of guide
Non-GAAP Op Margin
34.3%
Beat high end of guide
Quarterly metrics -- 8 quarters
| Metric | CY24Q1 (FY25Q3) | CY24Q2 (FY25Q4) | CY24Q3 (FY26Q1) | CY24Q4 (FY26Q2) | CY25Q1 (FY25Q3) | CY25Q2 (FY25Q4) | CY25Q3 (FY26Q1) | CY25Q4 (FY26Q2) |
|---|---|---|---|---|---|---|---|---|
| Systems Revenue ($B) | -- | $2.17 | $2.39 | $2.63 | $3.04 | $3.44 | $3.55 | $3.36 |
| CSBG Revenue ($B) | -- | $1.70 | $1.78 | $1.75 | $1.68 | $1.73 | $1.78 | $1.99 |
| Total Revenue ($B) | $3.87 | $3.87 | $4.17 | $4.38 | $4.72 | $5.17 | $5.32 | $5.34 |
| Revenue YoY | -- | -- | +8% est | +20% est | +22% est | +34% est | +28% est | +22.1% |
| Non-GAAP Gross Margin | -- | 48.5% | 48.2% | 47.5% | 49.0% | 50.3% | 50.6% | 49.7% |
| GM bps Change QoQ | -- | -- | -30bps | -70bps | +150bps | +130bps | +30bps | -90bps |
| Non-GAAP Op Margin | -- | 30.7% | 30.9% | 30.7% | 32.8% | 34.4% | 35.0% | 34.3% |
| Non-GAAP EPS | -- | -- | $0.86 | $0.91 | $1.04 | $1.33 | $1.26 | $1.27 |
| EPS YoY | -- | -- | -- | -- | +21% est | -- | +47% est | +39.6% |
Note: Lam reports on a fiscal year ending June. Post-split EPS basis (10:1 split). CY = Calendar Year.
Data sourced from Daloopa. Click any value for the source citation.
Free cash flow
Note: Lam reports cash flow on a semi-annual or quarterly fiscal basis. CY25Q4 = FY2026H1 cumulative ($6.22B FCF).
Revenue mix by end market (Systems Revenue %)
Key trend: Foundry has gone from 35% to 59% of systems revenue over the last year, driven by gate-all-around ramps and advanced packaging. NAND has been volatile quarter to quarter as customers modulate spending between DRAM and NAND.
Annual summary -- 5 years
CY2025 record: Management reported CY2025 revenue of $20.6B (up 27% YoY), non-GAAP gross margin 49.9%, operating margin 34.1%, and EPS $4.89 (up 49% YoY). CSBG record $7.2B.
Beat / miss -- FQ2 FY2026 (CY25Q4)
| Metric | Consensus | Actual | Surprise |
|---|---|---|---|
| Revenue | $5.23B | $5.34B | +2.1% BEAT |
| Non-GAAP EPS | $1.17 | $1.27 | +8.5% BEAT |
| Gross Margin | ~48.5% | 49.7% | BEAT high end |
| Op Margin | ~33% | 34.3% | BEAT high end |
8-quarter beat/miss track record
| Quarter | Rev Guide Mid | Rev Actual | Rev Beat | EPS Guide Mid | EPS Actual | EPS Beat |
|---|---|---|---|---|---|---|
| CY24Q2 (FY24Q4) | -- | $3.87B | -- | -- | -- | -- |
| CY24Q3 (FY25Q1) | -- | $4.17B | -- | -- | $0.86 | -- |
| CY24Q4 (FY25Q2) | $4.30B | $4.38B | +1.9% | $1.00 | $0.91 | Split-adjusted |
| CY25Q1 (FY25Q3) | $4.65B | $4.72B | +1.5% | $1.00 | $1.04 | +4.0% |
| CY25Q2 (FY25Q4) | $5.00B | $5.17B | +3.4% | $1.20 | $1.33 | +10.8% |
| CY25Q3 (FY26Q1) | $5.20B | $5.32B | +2.3% | $1.15 adj | $1.26 | +9.6% |
| CY25Q4 (FY26Q2) | $5.20B | $5.34B | +2.7% | $1.15 | $1.27 | +10.4% |
L5Q Revenue Beat Rate: 5/5 = 100% (average beat magnitude: +2.4%). L4Q EPS Beat Rate: 4/4 = 100% (average beat magnitude: +8.7%). Management has beaten guidance midpoints on revenue, gross margin, operating margin, and EPS every quarter for at least 5 consecutive quarters. This is a highly reliable guide-and-beat pattern.
Guidance -- FQ3 FY2026 (March 2026 quarter)
| Metric | Low | Mid | High |
|---|---|---|---|
| Revenue | $5.4B | $5.7B | $6.0B |
| Gross Margin | 48.0% | 49.0% | 50.0% |
| Operating Margin | 33.0% | 34.0% | 35.0% |
| EPS | $1.25 | $1.35 | $1.45 |
| Share Count | ~1.26B | ~1.26B | ~1.26B |
Guidance vs. consensus
| Metric | Guidance Mid | Consensus Est | Delta |
|---|---|---|---|
| Revenue | $5.7B | ~$5.3B | +$400M / +7.5% above consensus |
| EPS | $1.35 | ~$1.20 | +$0.15 / +12.5% above consensus |
Key guidance commentary:
- Revenue guide of $5.7B implies sequential growth of ~$360M (+6.7% QoQ) and continued quarterly growth acceleration.
- Gross margin guided down 70bps at midpoint (49.0% vs 49.7% actual) on customer mix headwinds -- China declining as a % of revenue reduces the favorable mix that has supported higher margins.
- Doug Bettinger stated the company expects growth every quarter through CY2026, with the year being second half weighted.
- WFE for CY2026 guided at ~$135B (up ~23% YoY from ~$110B in CY2025), constrained by clean room space availability.
- Lam expects to outperform WFE growth through SAM expansion and share gains.
Revenue and EPS growth with acceleration
| Quarter | Rev ($B) | Rev YoY | Accel bps QoQ | EPS | EPS YoY | EPS Accel |
|---|---|---|---|---|---|---|
| CY24Q3 (FY25Q1) | $4.17 | ~+20% est | -- | $0.86 | -- | -- |
| CY24Q4 (FY25Q2) | $4.38 | ~+20% est | ~flat | $0.91 | -- | -- |
| CY25Q1 (FY25Q3) | $4.72 | ~+22% est | +200bps | $1.04 | ~+21% est | -- |
| CY25Q2 (FY25Q4) | $5.17 | ~+34% est | +1200bps | $1.33 | -- | -- |
| CY25Q3 (FY26Q1) | $5.32 | ~+28% est | -600bps | $1.26 | ~+47% est | -- |
| CY25Q4 (FY26Q2) | $5.34 | +22.1% | -590bps | $1.27 | +39.6% | -- |
Inflection points identified
CY25Q2 (FY25Q4) -- Peak acceleration
Revenue YoY growth accelerated to ~34% as NAND upgrades (record upgrade revenue, up 90%+ YoY) layered onto strong foundry. This was the quarter where all three segments contributed and operating margin crossed 34% for the first time.
CY25Q3 (FY26Q1) -- Deceleration begins
Revenue YoY growth decelerated from ~34% to ~28% as the 50% affiliate rule removed ~$200M of China revenue from the quarter. Foundry hit 60% of systems revenue (record), partially offsetting the China headwind.
CY25Q4 (FY26Q2) -- Further deceleration but still strong
Revenue YoY decelerated to +22.1%, reflecting tougher comps and China normalization (35% of revenue, down from 43% in prior Q). However, this was still the 10th consecutive quarter of revenue growth and record revenue of $5.34B.
Looking forward to CY26 -- Re-acceleration expected
Revenue growth should re-accelerate in the second half of CY2026 as WFE ramps toward $135B and new fabs come online. Management expects growth every quarter through CY2026.
Positive catalysts
1. NAND Recovery / Upgrade Cycle ($40B+ opportunity)
Two-thirds of industry NAND bits were still at sub-200 layers as of early CY2025. Upgrade revenue was record in CY2025, up 90%+ YoY. Management says the $40B upgrade cycle is tracking ahead of schedule. New use case: non-volatile context memory for AI inference adds incremental NAND bit demand (every 2-3M accelerators sold = ~1pp of NAND bit demand growth). Greenfield NAND capacity additions expected to begin in CY2027-28 as clean room constraints ease.
2. Advanced Packaging / HBM (40%+ growth in CY2026)
Lam is the undisputed leader in electroplating (SABRE 3D, 6,000+ installed plating cells) and TSV etch for HBM. HBM3e to HBM4/4e transition with up to 16-layer stacking is a major tailwind. Advanced packaging growing from ~1% of foundry/logic WFE in 2021 to over 6% and rising. Mobile and consumer devices adopting more complex packaging schemes will expand TAM further.
3. Gate-All-Around (GAA) and Foundry Logic Inflections
~$1B incremental Lam SAM per 100K WSPM of GAA capacity. Aqara conductor etch doubled installed base in CY2025 with PTOR wins for EUV and high-aspect-ratio etch. Expect ~2x more Aqara applications at next-gen GAA nodes. Halo ALD Moly creates ~3x increase in metal deposition SAM per wafer at advanced GAA nodes. Backside power delivery still to come -- more metallization = more etch and deposition.
4. WFE Super-Cycle ($135B in CY2026)
Management guides CY2026 WFE to ~$135B (+23% YoY), constrained by clean room space. Data center CapEx framework: ~$8B WFE per $100B in incremental data center investment. Multi-year build-out extending into CY2027+. Every major chipmaker announcing multi-year capacity expansion plans.
5. SAM Expansion and Share Gains
SAM as % of WFE expanded from low-30s to mid-30s in CY2025, targeting high-30s over several years. Ship share of WFE grew well over one percentage point in CY2025. Ether dry resist, Cryo 3.0 dielectric etch, and Vantex CX+ all winning new applications. Management plans to gain share of WFE again in CY2026.
Risk catalysts
1. China Export Restrictions (~$600M CY2026 impact)
50% affiliate rule restricts shipments to certain domestic Chinese customers. China was 35% of revenue in CY25Q4 -- expected to decline to low-30s/high-20s % range in CY2026. Further regulatory tightening remains a risk. China has surprised to the upside for 3 consecutive years -- this time may be different with structural restrictions.
2. Clean Room Space Constraints
Limits CY2026 WFE upside but sets up CY2027 favorably. Risk that constraints delay spending rather than eliminate it.
3. Gross Margin Headwinds from China Normalization
As China revenue (which carries favorable margins) declines as a % of total, gross margins face headwinds. Management already guiding March Q gross margin down 70bps. Malaysia efficiency gains provide partial offset.
Street Q&A -- FQ2 FY2026 (Dec 2025) call
Summary: Well Answered: 20/26 (77%) |
Partially Answered: 6/26 (23%) | Deflected: 0/26 (0%)
Tim Arcuri
(UBS)
Partially Answered
WFE constraints -- can you quantify how much clean room space is costing WFE?
Doug declined to put a number on it (plans are somewhat fluid). Did confirm it sets up CY2027 well. Tim added fab announcements are for CY2027-28 capacity.
Tim Arcuri
(UBS)
Well Answered
Gross margin guided down on up revenue -- is it China mix?
Doug confirmed it is customer mix becoming less rich in March Q. Not a fixed cost business -- mix of product and customer is the key driver.
C.J. Muse
(Cantor)
Well Answered
Malaysia supply chain ramp and gross margin implications
Doug acknowledged Malaysia is their biggest manufacturing site. Mix component will dominate near-term more than volume ramp benefits.
C.J. Muse
(Cantor)
Well Answered
CSBG sustainability -- will December uplift continue?
Tim highlighted Equipment Intelligence and Dextro cobots as structural growth drivers beyond cyclical demand. Doug set expectations at high single digit, maybe low double digit CAGR for CSBG. Reliant piece might be lumpy.
Atif Malik
(Citi)
Well Answered
4F-squared DRAM timing and Aqara SAM implications
Tim said 4F-squared is towards the end of the decade for full volume. Aqara well-suited for it and also for CFET. In the meantime, many intermediate transitions will drive business.
Atif Malik
(Citi)
Well Answered
NAND sequential decline and new capacity timing
Doug confirmed NAND played out as expected. CY2026 will be a NAND growth year. Memory makers prioritizing DRAM over NAND near-term on better profitability, but NAND demand clearly building.
Vivek Arya
(BofA)
Well Answered
WFE share gain expectations and China assumptions for CY2026
Tim directly stated: we plan to increase our share of WFE again this year. Technology transitions accelerating. China expected flattish YoY with declining % concentration.
Vivek Arya
(BofA)
Partially Answered
$40B NAND upgrade -- where are we and is there a new number?
Tim said it is happening faster than expected but declined to update the $40B number, saying they may refresh it later in the year. Reiterated new AI inference NAND use case as incremental.
Srini Pajjuri
(RBC)
Well Answered
Where are the share gains -- NAND or foundry?
Tim directly answered: share gains from a combination of both NAND and foundry logic in CY2025. Confirmed Lam will outperform WFE in CY2026.
Srini Pajjuri
(RBC)
Well Answered
Op margin trajectory -- already at Analyst Day model levels
Doug acknowledged they are ahead of the 34-35% at $25-27B model and said they will probably later in the year need to come out and give you an update on that model. Committed to delivering leverage.
Jim Schneider
(Goldman)
Well Answered
NAND pivot from upgrades to greenfield -- timing?
Tim said greenfield is probably part of that multiyear build out 27/28 when clean room space is sufficiently available. Upgrades remain the priority near term.
Jim Schneider
(Goldman)
Partially Answered
Rank order of DRAM/NAND/Foundry growth rates into CY2027
Doug declined to rank-order for CY2027 but said all three segments are growing in CY2026 and expects all three to grow in CY2027 as well.
Krish Sankar
(Cowen)
Well Answered
Onshore manufacturing shift implications for margins
Doug outlined the global manufacturing footprint (Oregon, California, Ohio, Malaysia, Taiwan, Korea, Austria) and said they have flexibility to adjust with enough lead time.
Krish Sankar
(Cowen)
Well Answered
ALD Moly -- batch vs single wafer competitive dynamics
Tim strongly defended single-wafer position. NAND customers have committed to Lam tools for production. Multi-station architecture provides high productivity. Lam building installed base advantage and process learning.
Harlan Sur
(JPMorgan)
Well Answered
Supply chain constraints -- is Lam the bottleneck?
Tim said post-COVID investments built a much stronger, broader, deeper supply chain. Today Lam is not the big constraint -- clean room space is. Automated warehouses improving operational velocity.
Harlan Sur
(JPMorgan)
Partially Answered
Advanced packaging revenue quantification and growth drivers
Doug declined to quantify CY2025 advanced packaging revenue. Tim confirmed strength in both HBM and broader foundry/logic packaging.
Stacy Rasgon
(Bernstein)
Well Answered
Shape of the year -- is March the trough?
Doug was direct: I think we are gonna see growth every quarter. From the previous quarter. March grows, June from that, September from that. Second half weighted. Reasonably steady growth rate.
Stacy Rasgon
(Bernstein)
Well Answered
China -- was flattish comment about WFE or Lam revenue?
Doug clarified: WFE in China is flattish. 25 to 26, and everything else is gonna grow. So as a percent of the total, it is gonna be down. Low 30s or high 20s as a % of total.
Blayne Curtis
(Jefferies)
Well Answered
Reliant strength with China down -- where is demand?
Tim directly: It was multinational and it was China. A little bit of both.
Blayne Curtis
(Jefferies)
Well Answered
NAND shape -- second half weighted too?
Doug: Probably, it is a little bit second half weighted.
Melissa Weathers
(Deutsche Bank)
Well Answered
NAND new use case in data center -- is this an expansion?
Tim confirmed: this is a new use case for AI inference/TD cache that was not in prior forecasts. This is an expansion beyond projections given at Investor Day.
Melissa Weathers
(Deutsche Bank)
Well Answered
Inventory framework for CY2026
Doug: If we are right about how things play out here, it is very likely we are gonna need to build some inventory in total dollar terms. Will focus on turns but dollar inventory growth needed.
Joe Quatrochi
(Wells Fargo)
Well Answered
Supply chain bottlenecks?
Tim: We do not have any line of sight to significant problems at this point. Working across global supply chain to meet demand.
Joe Quatrochi
(Wells Fargo)
Well Answered
Is China flattish due to affiliate rule or demand change?
Doug: Probably a little bit of affiliate rule. But frankly, it is a broad-based set of customers spending in China that have nothing to do with the affiliate rule.
Vijay Rakesh
(Mizuho)
Well Answered
Foundry roadmap into CY2026-27 with leading edge acceleration
Tim outlined how each node increases Lam opportunity -- Aqara, advanced packaging, backside power all get bigger at future nodes.
Vijay Rakesh
(Mizuho)
Well Answered
HBM4 with 16 layers -- WFE content implications
Tim: larger dies require more clean room space and more tooling per bit -- the core of why WFE intensity rises with each HBM generation.
Assessment: Management was notably transparent on this call. The partial answers were all reasonable -- declining to put a number on WFE constraint magnitude, not yet refreshing the $40B NAND figure, not quantifying advanced packaging revenue, and not rank-ordering CY2027 segment growth. No questions were deflected. Management directly committed to share gains, quarterly sequential growth, and outperformance vs. WFE -- strong confidence signals.
Cross-transcript contradictions (5 transcripts reviewed)
1. China Revenue Direction -- Consistently Wrong, Then Finally Right?
FY2025Q2 (Jan 2025): Doug guided China concentration year over year to be down in CY2025, expected China WFE to be softer year-over-year. FY2025Q4 (Jul 2025): China was already at 35% (up from 31%), and WFE revised UP to $105B from $100B predominantly due to an uptick in domestic China-related spending. FY2026Q1 (Oct 2025): China surged to 43% of revenue. Doug acknowledged the surprise. Guided China to represent less than 30% of overall revenues in CY2026. FY2026Q2 (Jan 2026): China came in at 35% (slightly higher than original expectations). Now guiding China WFE flattish for CY2026. Verdict: Management has been wrong on China direction for 3+ years. The FY2026Q1 less than 30% guidance was already softened to low thirties or high twenties by FY2026Q2, just one quarter later. However, the structural headwind from the 50% affiliate rule is new and provides more credibility this time.
2. WFE Estimates -- Systematically Conservative
FY2025Q2 (Jan 2025): Guided CY2025 WFE at approximately $100 billion. FY2025Q3 (Apr 2025): Maintained $100B view. FY2025Q4 (Jul 2025): Raised to $105B. FY2026Q1 (Oct 2025): Slightly better than $105 billion. FY2026Q2 (Jan 2026): Final CY2025 WFE close to $110 billion. CY2026 guided at $135B. Verdict: CY2025 WFE started at $100B and ended at $110B -- a 10% miss on their own initial estimate. Investors should apply a similar upward bias to the $135B CY2026 figure, though clean room constraints may genuinely cap upside.
3. CSBG Growth Expectations -- Moving Target
FY2025Q2 (Jan 2025): Doug said CSBG probably flattish for CY2025. FY2025Q3 (Apr 2025): Still flattish messaging. FY2025Q4 (Jul 2025): Modest growth in CSBG for the calendar year. FY2026Q1 (Oct 2025): CSBG grew every year except one since Novellus merger. CY2025 record of $7.2B. FY2026Q2 (Jan 2026): CSBG up 12% sequentially in Dec Q. Long-term CAGR high single digit, maybe low double digit. Verdict: Initial flattish guidance proved conservative. CSBG ended CY2025 at a record $7.2B, significantly better than flat.
4. Gross Margin Trajectory
FY2025Q2 (Jan 2025): Doug said maybe trim a little just a little tiny bit on gross margins through CY2025 due to customer mix headwinds. FY2025Q4 (Jul 2025): Gross margin hit 50.3% -- record since Novellus merger. Doug directly told analysts think about where consensus is today, which is about 48% for December, contradicting the uptrend. FY2026Q1 (Oct 2025): Another record at 50.6%. FY2026Q2 (Jan 2026): Came in at 49.7% (down from 50.6%). Guide for March at 49% +/- 1pp. Verdict: Gross margin trajectory was better than guided for most of CY2025 before beginning to moderate. The step-down is real as China mix normalizes, but management initial trim a little call proved premature by several quarters.
5. Affiliate Rule Impact -- Evolving Estimate
FY2026Q1 (Oct 2025): December guidance contemplates roughly a $200 million revenue impact from the 50% affiliate rule. CY2026 impact estimated at ~$600M. FY2026Q2 (Jan 2026): China came in slightly higher than original expectations due to updates in the affiliate rule and the resulting timing of shipments. Verdict: The $200M Dec Q impact was partially delayed into March (some shipments shifted). The $600M CY2026 figure has not been updated but the timing profile may shift. The rule itself appears to be creating timing noise rather than a fundamentally different magnitude.
Macro and cross-company read-throughs
WFE Super-Cycle Confirmed at $135B for CY2026
CY2025 WFE came in at ~$110B (vs. $100B initial estimate). CY2026 guided at ~$135B (+23% YoY). This is a massive acceleration. For context: WFE was mid-$90B in CY2024, ~$95B in CY2023, ~$85B in CY2022. Read through: Positive for all semi equipment companies (AMAT, KLAC, TEL, ASML). The pie is growing fast enough that all can grow, even as share shifts.
Clean Room Space as the Binding Constraint
Every customer is asking for pull-ins. Demand exceeds what can be physically installed due to fab readiness. CY2026 is second-half weighted specifically because of clean room space availability. This sets up CY2027 as another strong year as fabs announced in CY2025-26 begin to come online. Positive for construction/engineering firms (JCI, APD, Linde for gas supply). Positive for ASML as litho goes in first. Constraint means WFE may be spreading over a longer period, reducing cyclicality risk.
Memory Cycle Divergence: DRAM Strong, NAND Inflecting
DRAM is being prioritized by memory makers due to better profitability (HBM, DDR5). DRAM prices strong. NAND is inflecting as AI inference creates new demand for non-volatile context memory. New use case language from management. $40B NAND upgrade cycle accelerating ahead of schedule. Greenfield NAND capacity additions expected CY2027-28. Positive for SK Hynix, Samsung, Micron (MU). Particularly bullish for NAND-heavy players as the use case expands beyond traditional storage. Enterprise SSD demand from AI data centers (256TB drives announced) is a structural shift.
Advanced Packaging Becoming a Separate WFE Category
Advanced packaging was 1% of foundry/logic WFE in 2021, now over 6% and growing. Lam expects 40%+ growth in CY2026. Panel-level packaging emerging as next frontier for larger AI chips. Positive for ASE Holdings (ASX), Amkor (AMKR), and all companies in the packaging supply chain. This is becoming a meaningful WFE sub-segment on its own.
China WFE Flattish but Mix Shifting
Domestic China WFE expected flat CY2025 to CY2026. Affiliate rule adds structural headwind (~$600M for Lam). But non-China WFE growing 30%+, so China as a % of total declining. Negative for SMIC, Hua Hong, and domestic Chinese chip companies subject to the affiliate rule. Neutral for equipment companies -- they lose some China revenue but gain much more from the non-China ramp.
Companies mentioned / cross-referenced
| Company | Context | Sentiment |
|---|---|---|
| TSMC (TSM) | Taiwan revenue at record levels. Leading-edge foundry logic strength (GAA, advanced packaging). | Bullish |
| Samsung (SSNLF) | DRAM and NAND customer. Prioritizing DRAM (HBM) over NAND. New NAND fab announced. | Bullish |
| SK Hynix | HBM leadership driving DRAM investment. NAND upgrades continuing. | Bullish |
| Micron (MU) | Enterprise SSD demand (256TB). NAND upgrade customer. | Bullish |
| Applied Materials (AMAT) | Closest competitor across etch and deposition. Not conceding advanced packaging or GAA. | Competitive |
| ASML (ASML) | Ether dry resist reduces EUV dose by 10%+ and boosts scanner productivity. | Complementary |
| Intel (INTC) | Implied in foundry/logic commentary. US fab buildout. | Neutral |
| NVIDIA (NVDA) | Need for NAND in AI systems validated at CES. AI inference NAND use case. | Bullish |
| JSR Corporation | Partnership announced for Ether dry resist materials and ALD precursors. | Positive |
| KLA Corp (KLAC) | Fellow oligopoly member. Multi-year agreements with customers. | Bullish |
Key macro indicators to monitor
Hyperscaler CapEx announcements -- each $100B = ~$8B of WFE demand
NAND bit demand growth -- every 2-3M accelerators sold = +1pp NAND bit demand
Clean room space timeline -- fab announcements converting to CY2027-28 openings
China regulatory developments -- affiliate rule enforcement and potential tightening
HBM generation transitions -- HBM3e to HBM4/4e drives higher die size, more equipment per bit
Verdict summary
BEAT / BEAT
10 consecutive quarters of revenue growth -- streak intact
FQ2 FY2026 delivered a clean four-way beat: revenue (+2.1%), EPS (+8.5%), gross margin, and
operating margin all exceeded consensus and the high end of guidance. This was record quarterly
revenue of $5.34B and the 10th consecutive quarter of growth. Management guided FQ3 FY2026
revenue to $5.7B (+7.5% above consensus) and EPS to $1.35 (+12.5% above consensus), signaling
continued acceleration. CY2026 WFE guided at ~$135B (+23% YoY) with Lam expected to outperform
through SAM expansion and share gains. The guide-and-beat pattern remains firmly intact (L5Q
revenue 100%, L4Q EPS 100%). Key swing factors: China regulatory trajectory (~$600M affiliate
rule headwind), gross margin sustainability as China mix normalizes, and execution on the $40B+
NAND upgrade cycle. Management was notably transparent on the call -- 77% of questions well
answered, 0% deflected.
Data sourced from Daloopa and company earnings transcripts (FY2025Q2 through FY2026Q2). Web search consensus data from Nasdaq, MarketBeat, Zacks, and Ticker Report.