Why Lam Research Stock Is Down 3% In Today's Premarket

Shares of Fremont, California-based chip-equipment maker Lam Research Corp. (LRCX) traded down about 3% in the early premarket session, after they fell nearly 3.80% last Friday.

Tuesday's slide is attributable to the broader market negativity, as seen by the decline in the U.S. stock futures and an analyst's downgrade.

Morgan Stanley analysts downgraded the Lam Research stock from 'Equal-Weight' to 'Underweight' in a note released on Monday, Investing reported. The analysts reduced the price target for the stock to $92 from $94, implying about 8% downside from current levels.

The research firm's pessimism toward the stock stemmed from its expectations that Lam Research's growth drivers in China and the NAND memory markets will slow significantly after two years of strong growth in 2024-2025.

The firm expects shipment growth to decelerate to 3% in 2026 from 82% in 2025. While acknowledging that Lam has had a strong presence in the NAND segment, gaining 25 percentage points of market share over the past decade, the firm said the company's end market lacks the robustness needed to drive further growth for both Lam and the NAND wafer fabrication equipment (WFE) sector.

On Stocktwits, retail sentiment toward Lam Research stock has remained 'bearish' since a month ago. The latest sentiment meter reading was at 40/100 af early Tuesday. The message volume on the stream was at 'low' levels.

The stock has gained nearly 40% year-to-date (YTD). The Koyfin-compiled average analysts' price target for the stock implied about 9% upside from current levels.

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