Lam is superb but the $329 price needs peak margins to last. I see sales flattening after September and set a $283 target, 14% down.
Key points
- $8.10 billion of sales guided for the September quarter of 2026 marks the cycle peak before flattening.
- 37.4% operating margin in the June quarter of 2026 (profit after operating costs as a share of sales) leaves little room for gains.
- 57.2 times trailing-year earnings of fiscal 2026 (profit per share for the past year) pays for perfection.
The call
Perfection must continue from here. At $329.36 a share today, the price needs about 40 times forward-year earnings for the next year (expected profit per share). That leaves no cushion if chip tool demand pauses.
Quarterly revenue jumps then flattens ($ billions)SEC XBRL facts to Jun-26 plus Sep-26 guide and author's estimates; as of Oct 8 2026.
Growth cools from here instead. Revenue flattens near $8.00 billion per quarter after the September quarter of 2026. Margins ease as pricing help fades and memory upgrades pull sales forward into 2026.
Valuation
| Step | Figure |
|---|
| Sales over the next year | $31.50 billion |
| Operating margin over the next year | 39% |
| Earnings over the next year | $8.32 a share |
| Multiple on next year earnings | 34 times |
| Target in twelve months | $282.88 a share |
A 34 times multiple still rewards a leader in etch and deposition tools for 2027 (machines that carve and coat chips). It sits below the 40 times paid today. A 14% fall over the next year from here is why this is a sell.
Target needs a below-market multiple on peak earningsAuthor's $8.32 NTM EPS times PE; price Oct 7 2026.
Risks
- Memory glut returns and NAND conversion stalls, seen in falling spot memory prices over two months in late 2026 and weaker producer sales in that period.
- China export rules tighten further, seen in China share falling under 20% of sales in a quarter in 2027 with no Taiwan offset in that quarter.
- Leading edge foundry projects slip, seen in deferred revenue in a quarter in 2027 (cash collected before delivery) falling in that quarter and payment delays rising in that quarter.
What would change my mind
Binding 2027 foundry orders with cash deposits that lift my sales path above $34.00 billion over the next year would turn me positive.