$Lam Research(LRCX)$ LRCX delivered a standout Q1 FY27 report. Revenue came in at $8.22B, up 22% QoQ, with Non-GAAP EPS of $2.20, both ahead of consensus, though it looks like it fell short of the whisper numbers.
On the positive side, operating leverage is showing up clearly. Non-GAAP operating margin topped 40.2% on disciplined opex. The supercycle visibility also stands out: industry WFE is projected to surge from around $150B in CY26 to over $200B in CY27, with visibility extending into 2028. Free cash flow was a monster at $3.24B for the quarter, funding $1.01B in buybacks and higher dividends. The AI drivers remain the core story, with a dominant footprint in HBM, advanced packaging including TSV and glass substrates, and backside power delivery.
The negatives are mostly around China concentration at 35% of revenue, which leaves long-term exposure to export restrictions. Supply chain bottlenecks and fab cleanroom capacity pacing are also keeping near-term deliveries in check.
I'm still strongly bullish here. The Q2 guidance midpoint of $8.6B easily clears expectations, especially with Systems revenue up more than 40% and multi-year AI demand still building.
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