{
  "@context": "https://orbyd.app/schemas/dossier.v1.json",
  "ticker": "LRCX",
  "name": "Lam Research Corporation",
  "url": "https://orbyd.app/dossiers/LRCX/",
  "json_url": "https://orbyd.app/dossiers/LRCX.json",
  "status": "RECENTLY_EXITED",
  "current_conviction": "LOW",
  "graded_conviction": "MEDIUM",
  "archetype": {
    "code": "a2",
    "n": 2
  },
  "current_thesis": "The WFE/AI-memory capex trade that ran Lam +119% YTD into June has rolled into a group-wide correction — the worst month for chip stocks since 2008, memory momentum broken (Micron/SanDisk). The ~2026-07-29 FQ4 print is now the binary: it either re-accelerates the WFE order narrative or unwinds the mid-50x re-rating. A fresh entry means paying up into a broken tape days ahead of that binary.",
  "invalidation_trigger": "A weekly close below $330 loses the rising 20-week EMA and the post-Micron breakout base; a 2026 WFE guide cut below ~$135B on a DRAM/NAND pricing rollover, or the theme flipping to saturated, then confirms the order-book break.",
  "catalyst_date": "2026-08-13",
  "outcome": "INVALIDATED",
  "outcome_date": "2026-07-02",
  "invalidation_fired": true,
  "themes": [
    "semi-foundry-equipment",
    "ai-datacenter-infrastructure",
    "ai-chips-memory"
  ],
  "tags": [],
  "sources": [],
  "notes": [
    "Fiscal year ends late June; FQ1 FY27 reports ~late October 2026 — no company-specific catalyst is scheduled between early August and then.",
    "10:1 stock split effective October 2024 — every per-share level referenced here is post-split.",
    "China was 26% of June-quarter revenue (Taiwan 27%, Korea 20%); export-control changes hit bookings before they appear in reported revenue.",
    "Lam sells etch and deposition wafer-fab equipment — track it with AMAT, KLAC and ASML, not with analog or microcontroller makers.",
    "CEO share sales run under a Rule 10b5-1 plan adopted 2026-02-24, so individual disposals are scheduled rather than discretionary.",
    "CSBG installed-base services were $2.47B of the $6.72B June quarter — a recurring layer that partly damps system-order cyclicality."
  ],
  "body_markdown": "## Current Thesis\n\nThe late-July binary resolved, and it resolved on the fundamentals. Lam's FQ4 FY26 print (2026-07-29) delivered $6.72B in revenue, +30% YoY, with gross margin at 52.0% — a 20-year high — and diluted EPS of $1.82 against $1.68 consensus. The September quarter is guided to $8.1B ±$400M versus roughly $7.09B consensus, and the calendar-2026 wafer-fab-equipment bar went from ~$140B to the low $150B range, with management citing 8–10 new fabs coming online. The stock closed 7/29 at $252.35, gapped to $303.52 at the 7/30 open, closed that session at $297.72, and printed $301.02 on 7/31.\n\nThe complication is what the tape did while that was happening. Through 7/30 the iShares Semiconductor ETF was down 27.43% for July, on pace for its worst month since September 2001, with none of its 34 holdings green — KLA -43.59%, Marvell -45.15%, Astera Labs -48.30% — while Nvidia fell 5.04% and Broadcom 1.97%. The de-rating was specific to memory, equipment and custom silicon. And the morning after a beat-and-raise, Morgan Stanley cut its target from $404 to $367, Wells Fargo from $450 to $350, and B. Riley to $350; Jefferies raised to $335, Needham held $390 and lifted estimates. Targets that clustered at $450–$500 in June now cluster $335–$390 against a $301 print.\n\nThe leg on offer has therefore changed shape. What is bought here is earnings growth against a multiple that has already been marked down, not the re-rating that carried the name to $438.50. That is a slower and more gradeable proposition than June's, and it has an unfilled gap beneath it.\n\n## Bull Case\n\n- **FQ4 FY26 (2026-07-29): revenue $6.72B, +30% YoY, a company record; diluted EPS $1.82 vs $1.68 consensus.** Prior guidance was $6.6B ±$400M and $1.65 ±$0.15 — the quarter cleared the top of its own EPS band.\n- **Gross margin 52.0%, the highest in 20 years; operating margin 38.4% against 35.0% the prior quarter.** The long-term model was raised the same day to mid-50s gross and mid-40s operating margin.\n- **September-quarter guide $8.1B ±$400M and EPS $2.15 ±$0.15, against consensus near $7.09B and $1.83.** Management framed it as more than 20% sequential growth. FY26 in total was $23.23B of revenue and $5.82 of diluted EPS.\n- **CY2026 WFE raised to the low $150B range from ~$140B on the 2026-07-29 call, with 8–10 new fabs cited.** Etch and deposition intensity scales with NAND layer count and DRAM/HBM migration; NAND revenue doubled sequentially in the June quarter.\n- **CSBG (installed-base services) $2.47B, +17% QoQ and +43% YoY.** This is the revenue layer that keeps running when system order timing slips.\n- **FY26 revenue $23.23B, up 26% from $18.44B; diluted EPS $5.82, up 41% from $4.13.** June-quarter capital returns: $246M of buyback plus $325M of dividends, against $5.6B of gross cash and $2.4B of deferred revenue.\n\n## Bear Case\n\n- **The equipment complex de-rated violently in July.** SOXX -27.43% through 7/30, worst month since September 2001, zero of 34 holdings green, KLA -43.59%. Lam ran from a $438.50 52-week high to a $252.35 close on 7/29 — a drawdown of more than 40%.\n- **Targets were cut the morning after the beat.** Morgan Stanley $404→$367, Wells Fargo $450→$350, B. Riley →$350 on 7/30. Estimates went up and targets came down; the multiple is what moved.\n- **Trailing valuation stays demanding.** Roughly 52x trailing earnings at $301.02 (7/31) on a $376.66B market cap, against the high-teens-to-low-20s Lam carried for most of the prior decade.\n- **The two-session move is already large and the gap is unfilled.** 7/30 opened at $303.52 with a session low of $271.50 and a high of $321.18. Nothing between $271.50 and $252.35 has been retested.\n- **China was 26% of June-quarter revenue** (Taiwan 27%, Korea 20%). Export-control changes hit bookings well before they appear in reported revenue.\n- **Insider supply came into the high.** CEO Timothy Archer sold 30,000 shares at $390.01 on 2026-07-02 (~$11.7M) under a 10b5-1 plan adopted 2026-02-24.\n\n## Setup & Price Structure\n\nThe June frame — a rising 20-week EMA around $330–350 — stopped describing this tape once the name traded from $438.50 down to a $252.35 close on 7/29. The structure that governs now is the earnings gap. 7/30 opened at $303.52 (+20.28% from the prior close), traded $271.50–$321.18, and closed $297.72 (+17.98%); 7/31 printed $301.02. Two shelves define the reaction: $271.50, the low of the gap session, and $252.35, the pre-print close at which the gap fills completely.\n\nOverhead, $321.18 is the first resistance from the gap session itself, and the analyst cluster sits $335–$390 — Jefferies $335, B. Riley and Wells Fargo $350, Morgan Stanley $367, Needham $390. That band sits only modestly above spot, a far thinner cushion than June's $450–$500.\n\nPositioning observables, stated without a verdict: retail-facing coverage on 7/30 ran to \"10 Stocks Driving the Move\" and \"Big Stocks Moving Higher,\" momentum framing arriving after an 18% session rather than before it. A Micron-linked ETF lost half its value in a month while remaining up nearly 2,500% over a year (7/30 headline), which measures how much unwind the memory complex absorbed without surrendering the year. The CEO's 7/02 sale at $390.01 was scheduled under a February plan. And there is no imminent company earnings date — the next Lam print is roughly late October — so near-term catalyst pressure arrives from outside the name.\n\nLife-cycle phase: **MATURING**. The narrative is well known and still working — the WFE bar went up on 2026-07-29 and Needham raised estimates on 2026-07-30 — while flow has clearly moderated, with three houses cutting targets into a beat and the group posting its worst month since 2001. It is not accelerating: participation contracted across all 34 SOXX holdings in July. It is not saturated or dead either, since the order book just re-accelerated and margins reached a 20-year high.\n\n## Catalyst Calendar (next 30 days)\n\n- **2026-08-13 — Applied Materials FQ3 FY26 print** (date confirmed 2026-07-23). AMAT guided $8.95B ±$500M and EPS $3.36 ±$0.20. This is the nearest independent test of Lam's low-$150B WFE call from a second vendor.\n- **~2026-08-26 (est.) — Nvidia FQ2 FY27 print.** Nvidia fell only 5.04% in July while equipment names fell 40%+; its guide determines whether AI-capex enthusiasm re-broadens down the supply chain or stays concentrated at the compute layer.\n- **~2026-10-21 (est.) — Lam FQ1 FY27 print.** Outside the 30-day window, and the point at which the $8.1B ±$400M guide and the low-$150B WFE bar get marked. Nothing company-specific is scheduled before it.\n\n## What Would Change Our Mind\n\nThe gap is the structure that matters. The 7/30 session opened at $303.52 and never traded below $271.50; the entire post-print re-rating sits above the $252.35 close of 7/29. A weekly close below $252 fills that gap outright and says the market declined to pay for a raised WFE outlook plus an $8.1B guide against $7.09B consensus — at which point July's de-rating reads as a repricing of the cycle's terminal multiple rather than an overshoot.\n\nSecondary conditions, each separately observable:\n\n- Applied Materials guiding its October quarter below consensus on 2026-08-13 would put the low-$150B 2026 WFE figure in question from a second vendor.\n- Lam walking the 2026 WFE number back below $150B at the ~late-October print, or guiding December revenue below the September level.\n- The theme flipping to saturated: further target cuts while estimates rise, or the $335–$390 cluster compressing toward spot instead of leading it.\n\nRunning the other way, a weekly close holding above $321.18 — the 7/30 session high — with the WFE basket participating would argue that July was a positioning event, and would put the $335–$390 cluster in play as the next reference band.\n\n## Correlation Notes\n\n- Lam sells etch and deposition wafer-fab equipment and trades with AMAT, KLAC and ASML. It is not an analog or MCU maker. KLA fell 43.59% in July; the basket moves together on WFE headlines.\n- The July divergence is the structural fact to track: Nvidia -5.04% and Broadcom -1.97% against KLA -43.59%, Marvell -45.15%, Astera Labs -48.30%. AI compute leadership held while the memory, equipment and custom-silicon second derivative was cut roughly in half. Lam sits in the half that was cut.\n- Memory-maker prints and DRAM/NAND contract pricing remain the order read-through. June-quarter systems mix: foundry 44%, NAND 23%, DRAM 23%.\n- Geographic concentration: Taiwan 27%, China 26%, Korea 20% of June-quarter revenue. Korea tape shocks and China export-control headlines both transmit directly into the order narrative.\n- Hyperscaler results move this name on the same session. Microsoft's report was the proximate trigger for the 7/30 chip rebound — the Nasdaq-100's best day since May 2025, with SanDisk +24% — and preceded any Lam-specific data on that tape.",
  "first_seen": "2026-06-18",
  "last_analyzed": "2026-07-31T18:18:08+00:00",
  "last_synthesized": "2026-07-31",
  "last_update_source": "watchlist_research",
  "license": "Content © orbyd. Cite the canonical URL."
}