An influential semiconductor equipment analyst elevated Lam Research’s rating to Buy, citing robust wafer fabrication equipment (WFE) spending forecasts of 10–15% year-over-year growth. The upgrade reflects raised estimates for both EBITDA and free cash flow, driven by persistent memory supply bottlenecks and accelerating AI chip production needs. The analyst’s base‐case scenario implies roughly a mid-teens percentage upside to the prior consensus valuation, with a more bullish projection suggesting nearly a 40% gain under optimal spending conditions.

On Thursday, RBC Capital initiated coverage of Lam Research with an Outperform rating and set its fair‐value projection at a level representing nearly a 20% upside. This marks one of six major bullish inflows into the stock since last September, according to market‐flow data. The RBC call follows earlier positive notes from other brokers, collectively reinforcing confidence in Lam’s ability to capture the bulk of AI-related fab equipment orders this cycle.

Lam Research’s shares have surged more than 165% over the past year, outpacing the broader semiconductor index. This remarkable advance is underpinned by a 30% year-over-year increase in quarterly revenues and expanding operating margins, which reached a record high in the most recent period. Investor interest has been fueled by Lam’s leadership in critical etch and deposition tools essential for next-generation AI accelerators.

Management projects that China‐related revenues will dip below 30% of total sales in 2026 due to tightening export controls, down from roughly 40% in recent years. Despite this regional shift, robust demand from hyperscale data centers and AI chipmakers in North America and Europe is expected to offset potential headwinds. Company forecasts anticipate mid-teens overall revenue growth next fiscal year, supported by a diversified global customer base.