Lam Research reported second-quarter revenue of $5.34 billion for the period ended December 28, 2025, representing a 22% year-over-year increase from $4.38 billion in the same quarter a year ago. Non-GAAP earnings per share came in at $1.27, an 8.6% surprise to consensus estimates of $1.17 and a 39.6% increase over the prior-year EPS of $0.91. Systems revenue reached $3.36 billion, up 28% year-over-year, while customer support and services generated $1.99 billion, climbing 14% from December 2024 levels.

The company delivered a non-GAAP gross margin of 49.7%, down slightly from 50.6% in the prior quarter but up 230 basis points year-over-year. U.S. GAAP gross margin stood at 49.6% with operating income at 33.9% of revenue. On a non-GAAP basis, operating income was 34.3% of revenue, driven by tight cost control with operating expenses of $827 million. Net income totaled $1.598 billion, yielding a return on equity of 61% and a return on assets of 28%.

Management provided third-quarter guidance calling for revenue in the range of $5.4 billion to $6.0 billion, versus the consensus of $5.3 billion, and non-GAAP adjusted EPS of $1.25 to $1.45 against a consensus of $1.20. The forecast implies sequential revenue growth of up to 12% and margin stability around 49% of revenue. Capital expenditure plans by key customers in memory and foundry sectors are expected to underpin order momentum for advanced etch and deposition tools.

Several research firms have raised their ratings and price targets following the quarter’s results. Summit Insights Group upgraded the stock from Hold to Buy, citing an 8.99% EPS surprise and sustained double-digit revenue growth. Evercore ISI lifted its target by over 40% in the past month, and Deutsche Bank raised its model to reflect higher forecasted capital spending by semiconductor manufacturers. With shares up nearly 200% over the past year, institutional ownership stands above 80%, indicating strong confidence in multi-year outperformance tied to the AI-driven equipment cycle.