Record Earnings Followed by Sharp Drop, Upgrades Drive Rebound
Semiconductor equipment maker Lam Research rebounded on the 26th, closing up 3.22% at $237.5, stabilizing after a sharp sell-off in prior trading sessions. According to financial media Investing.com, although the company's latest quarterly revenue and earnings per share both beat market expectations, management acknowledged that supply chain bottlenecks were limiting revenue growth, raising investor concerns, and with Wall Street firms raising ratings alongside a broader U.S. market recovery, the shares finally rebounded.
Lam Research reported Q1 FY2027 results on the 21st, with earnings per share of $2.20 and revenue of $8.22 billion, both above Wall Street expectations. CEO Archer said artificial intelligence continued to drive semiconductor demand higher, with increasing component complexity, pushing September-quarter revenue, profit and earnings per share to record highs, showing AI-related demand remains the key growth driver.
Supply Chain Bottlenecks Weigh on Guidance, Shares Plunged Over 9% on the 22nd
The earnings beat failed to support the shares immediately, which instead plunged over 9% on the 22nd. The main reason was CFO Bettinger saying December-quarter revenue guidance could have been above $8.6 billion absent recent supply chain bottlenecks, raising concerns that growth for semiconductor equipment makers is being constrained. Despite the rebound on the 26th, Lam Research is still down nearly 25% over the past month and remains far below its 52-week high of $438.50.
Analysts attributed the rebound on the 26th to analyst rating support. Wall Street Zen upgraded the stock from Hold to Buy, Bank of America reiterated Buy, and Morgan Stanley maintained Overweight, indicating some analysts remain positive on the outlook and view the supply chain issues as likely only a short-term headwind. In addition, the S&P 500 and Nasdaq both rose 0.4% in early trading on the 26th, rebounding after two consecutive weeks of declines, with Big Tech earnings due in quick succession and investors awaiting the Federal Reserve rate decision, helping sentiment recover. The market will continue to watch whether the bottlenecks can improve and whether the company can convert strong AI chip demand into actual revenue and profit.