Lam Research Falls After Strong Quarter as China and Supply Weigh on Outlook
Lam Research shares dropped roughly 7% after hours even though its September-quarter revenue and adjusted EPS set records and its December revenue outlook slightly exceeded consensus. The midpoint of the current guidance implies less than 5% sequential growth, which management linked to reduced domestic China sales and component shortages. Excluding China, the company's December revenue could still grow at a double-digit rate depending on how much China's share falls.
Lam’s September quarter set records: revenue reached $8.22 billion, up 54% year over year, and adjusted EPS was $2.20 versus $1.26. Its December outlook centers on $8.6 billion, with a $400 million range, and EPS of $2.33 plus or minus $0.15.
China supplied 35% of September revenue, up from 26% in June, and management expects that share to fall sharply. The CFO said supply limits held the guide back and pushed some shipments into March. Record operating margin was 40.2%, and free cash flow reached $3.24 billion.
The after-hours slide could affect retail and institutional investors, including pension and retirement savers with semiconductor exposure, by reducing portfolio values. Suppliers and workers tied to chip-equipment production may see demand timing shift if delayed orders move to March. Because Lam’s tools support AI-related chipmaking, its outlook may influence how quickly capacity expands, though the China pullback and component shortages could temper near-term hiring and investment.