Lam Research Could Be a Major Beneficiary in the AI Memory Chip Boom
The demand for memory chips driven by artificial intelligence is expected to persist well into the future, with Deloitte estimating that the memory crunch will not ease until 2029. While Micron and Sandisk have seen their stock prices decline recently due to market rotations out of memory stocks, Lam Research (LRCX) has emerged as a potential major beneficiary in this sector. Lam Research provides equipment essential for manufacturing DRAM and NAND flash chips used by companies like Micron and Sandisk. With 46% of its revenue coming from the memory segment, it is well-positioned to benefit from increased capital expenditures (capex) among leading memory manufacturers such as Samsung, SK Hynix, and Micron. These three firms are projected to increase their combined capex by 340% between 2024 and 2027. Lam Research's recent financial performance reflects this trend: its revenue rose 26% year-over-year in fiscal 2026 to $23.2 billion, with net income increasing by 35%. The company is also forecasting strong growth for the current quarter.
Topics: AI demand Lam Research memory chips Micron Technology SanDisk