Lam Research Is on a Roll. It Still Has Room to Climb, Analysts Say.

Deutsche Bank upgraded the chip-equipment stock Lam Research to Buy from Hold. (Dreamstime)

Key Points

• Lam Research stock was upgraded to Buy from Hold by Deutsche Bank, with a price target increase to $150 from $100.
• The company’s exposure to memory and leading-edge logic chips positions it for growth amid rising semiconductor demand.
• Deutsche Bank projects Lam Research’s 2026 revenue growth at 11%, significantly above the 4% Wall Street consensus.

The semiconductor-equipment market is heating up, and Lam Research is well positioned to benefit from the surge in demand, according to Deutsche Bank.

The bank upgraded Lam stock to Buy from Hold. It raised its target for the stock price to $150 from $100 in a research note, arguing the company’s exposure to memory and leading-edge logic chips give it a solid platform for growth.

Lam stock was up 2.7% to $131.80 on Monday, just off the record closing high reached on Sept. 22, according to Dow Jones Market Data. Shares have climbed 83% this year and more than 30% this month alone.

Wall Street has noticed increasing demand for wafer fabrication equipment, or WFE, in recent weeks, leading to upgrades and price-target hikes for Lam and competitors such as Micron Technology and Applied Materials . Deutsche Bank projects total WFE sales will grow 6% this year and 5% in 2026, compared with earlier forecasts for 3% and 4%, respectively.

“We believe LRCX is well positioned to outperform peers over the next twelve months given these cyclical and secular tailwinds,” wrote Deutsche Bank’s Melissa Weathers.

The memory-chip market has been at the forefront of this unexpected spike in demand, analysts at Wedbush Securities and Barclays wrote earlier this month. That’s good news for Lam. Around half of the company’s sales historically have come from the memory-chip segment, Deutsche Bank noted.

But the company has also diversified in recent years to supply makers of leading-edge logic chips. Deutsche Bank expects this trend to continue. “All told, we believe LRCX’s leverage to this fast growing area of semiconductor manufacturing remains underappreciated by investors,” Weathers said.

The firm anticipates calendar-year revenue growth of 11% in 2026, compared with the Wall Street consensus forecast of 4% growth. Lam may continue to perform better than anticipated even as the stock reaches new highs and expectations rise, Deutsche Bank said.

Write to Nate Wolf at nate.wolf@barrons.com