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Lam Research (LRCX) is trading higher today after beating expectations and issuing upside guidance in its Q1 (Sep) report last night. The company extended its streak of 3+ years of EPS beats, while revenue rose 27.7% yr/yr to a record $5.32 bln. Q2 guidance calls for EPS of $1.05-1.25 and revenue of $4.9-5.5 bln.

• Embedded in the Q2 guidance is a $200 mln hit from new China restrictions, with about $600 mln expected in CY26; still, guidance was above forecasts as global multinationals offset China declines.
• WFE spending is tracking slightly above the prior $105 bln view, aided by stronger HBM investments. Noted that CY26 setup looks robust for equipment spending, with AI demand sustaining strength in foundry/logic, DRAM, and NAND upgrades.
• Management frames AI data center capex as a durable tailwind; with deposition/etch at the core, LRCX sees billions of dollars in SAM expansion and share gain opportunities.
• NAND upgrades represent about $40 bln in WFE spend as bit demand rises; noted that cleanroom limits may speed new builds and feels well positioned for AI-driven foundry and DRAM inflections.
• Foundry made up 60% of systems revenue (up from 52% in JunQ), marking a third straight record quarter, driven by leading-edge and mature node spending.
• Memory was 34% (down from 41%) as NAND (18%) softened on customer timing, while DRAM (16%) rose on continued HBM demand tied to AI.

Briefing.com Analyst Insight

LRCX stayed true to form this quarter, beating expectations and leaning bullish on a strong multi-year growth setup fueled by AI infrastructure buildouts. Management's tone was notably confident, highlighting higher WFE expectations, robust bit demand, and an expanding SAM tied to deposition and etch leadership. While China headwinds persist, global multinationals are expected to "more than offset" the decline, with sustained tailwinds across memory and foundry segments reinforcing its positioning in the AI cycle.