Lam Research Posts Record $8.22 Billion Quarter and First-Ever 40% Operating Margin but Supply Warning Sends Stock Down 9%

Lam Research reported its strongest quarter in company history for the period ended September 27, 2026, with revenue of $8.22 billion, up sharply from $6.72 billion in the prior quarter. The company posted GAAP net income of $2.75 billion, or $2.19 per diluted share, and achieved a 40% operating margin for the first time ever.

Despite the record results, shares fell roughly 9% to around $236 after management warned that supply chain constraints are limiting revenue and issued second-quarter adjusted earnings guidance whose midpoint came in slightly below analyst expectations. The guidance miss was enough to overshadow the record-setting quarter, with investors treating the supply bottleneck as a ceiling on near-term growth.

The selloff spread across the semiconductor equipment sector. Applied Materials dropped 6% and ASML Holding fell 4% in sympathy, while chipmakers including AMD and Intel each fell roughly 4% and Nvidia dropped around 2%. Nasdaq 100 futures declined approximately 500 points in premarket trading, as the combination of Lam's supply warning, disappointing results from Tesla and IBM, and renewed concerns about the scale of AI capital spending weighed on sentiment broadly.

Bank of America cut its price target on Lam Research, citing a valuation reset in light of the constrained outlook. Other analysts on Wall Street also trimmed targets but maintained a bullish long-term view, arguing that the supply headwinds are temporary and that demand for chip-making equipment tied to AI infrastructure remains structurally strong.