Investing.com -- Wolfe Research downgraded Lam Research Corp (NASDAQ:LRCX) to "Peer Perform" on bearish views on NAND and the stock’s valuation premium over Applied Materials (NASDAQ:AMAT).
Wolfe highlighted structural issues in the NAND market, including oversupply and limited price elasticity, exacerbated by China’s tech migration and export controls. These challenges could hinder a rebound in NAND spending, which is critical to LRCX’s growth projections.
With NAND expected to drive 26% of Lam’s revenue growth in 2025 and 58% in 2026, Wolfe sees risks to consensus estimates. The firm also flagged Lam's forecasted 16% year-over-year growth in 2025 as overly optimistic compared to Wolfe's 5% outlook for the wafer fabrication equipment market.
The downgrade reflects market exposure concerns, though it does not imply a loss of market share for Lam.