Is Lam Research Stock Cheap Enough Yet

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Shares of Lam Research (LRCX) closed at $230.10 on October 23, 2026, sitting 46.8% below their high of June 30. The stock lost 25.1% from September 24 to October 23 alone, while the S&P 500 slipped about 1%. That fall occurred even as the company reported a fifth straight quarter of record revenue. Has the fall made the shares cheap, or only less expensive than they were in June?

How Does Lam Research Stock Compare With Past Years?

The shares are less expensive than they were in June, but they are not cheap compared with past years. At the October 23 close, Lam Research stock traded at 34.1 times the past twelve months' earnings. That multiple is well below the 74.6 times recorded at the end of June 2026, yet it remains above the 29.1 times seen a year earlier at the end of September 2025. It also sits above every September-end reading from 2021 to 2024.

The underlying business is also stronger than it was. Lam Research posted an operating margin of 37.0% over the past twelve months, compared with 33.0% a year earlier. That marks the highest margin at any quarter end in data going back to fiscal 2017. Management credited the September quarter's record gross margin to a favorable customer and product mix. The recent decline has therefore brought the valuation multiple back toward its level of a year ago, rather than dropping below it, while margins sit at their peak. Even after the drop, the shares are up 63.7% over twelve months, outpacing the 15.1% gain for the S&P 500.

What Are Buyers Of Lam Research Stock Counting On?

Management said near-term supply chain constraints kept the guidance from being slightly higher, and that sales delayed by timing will ship in the March quarter. Management also expects China to account for a significantly lower share of revenue in the December quarter.

Management sees the wider market growing. The company expects chip makers' spending on wafer fabrication equipment to top $200 billion in 2027, up from the mid $150 billion range it expects for 2026. Management said sales held back by supply limits should ship in the March quarter rather than be lost.

Lam Research's Next Report And Past Reactions

Lam Research is expected to report earnings in January 2027. The results will cover the December 2026 quarter, which represents its fiscal second quarter of 2027. The stock has moved in both directions following recent releases. Shares fell 11.8% on October 22, the day after the October 21 report, and they rose 16.1% in the two trading days after the July 29, 2026 report.

Investors buying before January also assume the risk of the stock's swings during market shocks. Lam Research stock fell 56% during the 2022 inflation shock, a period when the S&P 500 fell 24%. When the next report arrives, revenue for the December 2026 quarter, set against management's own guidance, is the number to watch.

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