• Earlier this month, IBM and Lam Research announced a five-year collaboration to develop new materials, etch and deposition processes, and High NA EUV lithography techniques aimed at enabling sub-1nm logic scaling using IBM’s Albany NanoTech research facilities and Lam’s process tool portfolio.
• This effort positions Lam Research at the center of next-generation chip manufacturing flows, such as nanosheet, nanostack devices, and backside power delivery, potentially deepening its role in advanced-node AI and logic infrastructure.
• We’ll now examine how Lam’s expanded IBM collaboration around sub-1nm High NA EUV processing could influence the company’s broader investment narrative.

Uncover the next big thing with 32 elite penny stocks that balance risk and reward.

Lam Research Investment Narrative Recap

To own Lam Research, you need to believe that rising AI-driven chip complexity keeps lifting demand for its etch and deposition tools, even through industry cycles. The IBM High NA EUV collaboration supports that thesis by embedding Lam in early sub‑1nm process development, but it does not remove near term risks around WFE cyclicality, customer capex swings, or China exposure. If AI or memory spending cools, Lam’s recent momentum could still face pressure despite this agreement.

Among recent updates, the expanded IBM partnership is most relevant here because it directly ties Lam’s Aether dry resist, Kiyo and Akara etch, and Striker and ALTUS Halo deposition platforms into IBM’s sub‑1nm roadmap. That kind of early tool-of-record positioning could reinforce existing catalysts around AI, advanced nodes, and higher process intensity, while also justifying Lam’s continued heavy R&D spend at a time when investors are watching margins and capital efficiency closely.

Yet, despite all this upside, investors should also be aware of how quickly WFE spending and memory cycles can reverse...

Lam Research's narrative projects $23.6 billion revenue and $6.7 billion earnings by 2028. This requires 8.5% yearly revenue growth and about a $1.3 billion earnings increase from $5.4 billion today.

Uncover how Lam Research's forecasts yield a $274.90 fair value, a 22% upside to its current price.

Exploring Other Perspectives

Compared with the baseline view, the most optimistic analysts were already assuming Lam could lift earnings to about US$7.9 billion by 2028, and the IBM sub 1 nm push may either strengthen that case or expose how sensitive those expectations are to export controls and China access.

Explore 11 other fair value estimates on Lam Research - why the stock might be worth less than half the current price!

Form Your Own Verdict

Disagree with existing narratives? Extraordinary investment returns rarely come from following the herd, so go with your instincts.

• A great starting point for your Lam Research research is our analysis highlighting 3 key rewards and 1 important warning sign that could impact your investment decision.
• Our free Lam Research research report provides a comprehensive fundamental analysis summarized in a single visual - the Snowflake - making it easy to evaluate Lam Research's overall financial health at a glance.

Ready To Venture Into Other Investment Styles?

Every day counts. These free picks are already gaining attention. See them before the crowd does:

• Capitalize on the AI infrastructure supercycle with our selection of the 34 best 'picks and shovels' of the AI gold rush converting record-breaking demand into massive cash flow.
• AI is about to change healthcare. These 35 stocks are working on everything from early diagnostics to drug discovery. The best part - they are all under $10b in market cap - there's still time to get in early.
• The best AI stocks today may lie beyond giants like Nvidia and Microsoft. Find the next big opportunity with these 22 smaller AI-focused companies with strong growth potential through early-stage innovation in machine learning, automation, and data intelligence that could fund your retirement.

This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.