So, 2026 is shaping up to be the year of the semiconductor. I mean, obviously. It’s always “the year of” something in tech, isn’t it? But this time, it’s not just hype. The PHLX Semiconductor Sector index is up 12.5% already, which, let’s be honest, is a solid return in any economic climate. Micron and Sandisk are leading the charge – up 47% and 193% respectively – because everyone suddenly needs more memory chips. Apparently, our phones, computers, and, crucially, the AI overlords running everything require…memory. Who knew?
But while those two are doing well, there’s one company that’s quietly crushing it: Lam Research. And it’s not about some revolutionary new app or a TikTok influencer endorsement. It’s about equipment. Yes, the stuff that makes the chips. Think of them as the unsung heroes, the stage crew of the tech world. They supply the wafer fabrication equipment – WFE, if you want to sound important at cocktail parties – to the big names like Nvidia, Qualcomm, and, naturally, Apple. About 59% of their business comes from that, but a sneaky 36% is in memory manufacturing. Which, as we’ve established, is the hot ticket right now.
See, Lam Research makes the tools that build both DRAM – the speedy stuff for processing – and NAND flash memory, which is where you store all your cat videos. Micron and Sandisk are scrambling for supply because, surprise, everyone wants more storage. Micron basically sold out of their high-bandwidth memory (HBM) chips before the year even started. That’s like pre-selling all the pumpkin spice lattes in July. They’re now planning a $20 billion capital expenditure increase – which, let’s be real, is just a fancy way of saying “we need more stuff” – and that number could easily climb. It’s a virtuous cycle, or a potential bubble, depending on your preferred doomsday scenario.
Sandisk is also reporting demand exceeding supply, which is corporate-speak for “we can’t keep up.” As these companies rush to fill the void, Lam Research is perfectly positioned to benefit. Hence, a 22% year-over-year revenue increase in their second quarter – $5.34 billion, if you’re keeping score. Their earnings jumped almost 40% to $1.27 per share. It’s a good time to be in the business of making the things that make the things.
Lam’s stock is up 34% this year, and they’re predicting continued growth – a 21% revenue increase and a 30% jump in adjusted earnings next quarter. But honestly, with the memory shortage expected to last through 2028, they might actually underestimate their potential. It’s like saying you expect a moderate amount of water at Niagara Falls.
The Stock Could Keep Crushing the Market
They’re forecasting $135 billion in wafer fabrication equipment spending this year – up 23% from last year. But, and this is key, they’re also warning that supply constraints could drive that number even higher. Which, in corporate-speak, means “we’re hoping for even more money.” So, if you’re looking for a tech stock with some serious momentum, Lam Research might just be the one. Just don’t blame me when the robots take over and demand all the memory chips for themselves.
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2026-02-08 16:12