Three Engines Firing, But the Stock Already Knows It

Lam Research delivered record revenue and EPS in the March quarter as AI-driven demand reshapes the semiconductor industry, according to Tim Archer, Lam Research's President and Chief Executive Officer. The company reported a non-GAAP gross margin of $2,658 million, or 49.7% of revenue, and non-GAAP net income of $1,598 million, or $1.27 per diluted share, for the December 2025 quarter. Cash, cash equivalents, and restricted cash balances decreased to $4.77 billion at the end of the March 2026 quarter compared to $6.20 billion at the end of the December 2025 quarter, primarily due to cash deployed for capital return activities, principal payment on debt instruments, and capital expenditures. The geographic distribution of revenue during the March 2026 quarter was led by China at 34%, followed by Korea and Taiwan each at 23%.

Lam reported March-quarter revenue of $5.84 billion, up 9% sequentially and 24% year-over-year, with non-GAAP EPS of $1.47 beating the top of guidance. Non-GAAP gross margin reached 49.9%, at the high end of the guided range and up sequentially. Management didn't stop there: for the June quarter, Lam guided revenue to $6.6 billion (±$400 million), with non-GAAP gross margin of 50.5% (±1%) and operating margin of 36.5% (±1%). The June-quarter revenue midpoint was roughly 10% above consensus, and guided earnings were approximately 15% higher.

Three features of this report deserve emphasis because they are structural, not one-off.

The Services Platform Takes Shape

Customer Support Business Group (CSBG) revenue hit $2.1 billion, up 6% sequentially and 25% year-over-year — management's first $2 billion-plus quarter for the segment. Demand was broad-based across spares, upgrades, and services.

What matters is not just the size but the direction. Lam...