Lam Research Shares Plunge 3.12% Ranking 49th as Morgan Stanley Cuts Rating Over China NAND Concerns Amid Long-Term Gains

Lam Research (LRCX) shares fell 3.12% on September 2, with a trading volume of $1.42 billion, ranking 49th in the market. The decline followed a downgrade from Morgan Stanley, which cut its rating to "Underweight" from "Equal-Weight," citing concerns about slowing growth in China and NAND memory markets. The firm also reduced its price target to $92 from $94, reflecting expectations of a sharp deceleration in system shipment growth, projected to drop from 82% in 2025 to 3% in 2026. The move added to broader semiconductor sector weakness, exacerbated by a wider market selloff and tepid investor sentiment.

Analysts highlighted that Lam’s recent volatility, including multiple 5% swings in the past year, suggests the market views the downgrade as significant but not transformative. A prior 4.3% drop had occurred after U.S. restrictions on semiconductor equipment exports to China, which are expected to hurt sales for U.S.-based equipment makers. However, Lam’s stock remains up 32.7% year-to-date, trading 10.5% below its 52-week high. The broader tech sector’s underperformance, including weak guidance from firms like Dell and Marvell, further pressured the stock.

Long-term investors who purchased $1,000 of Lam shares five years ago would now see the value rise to $2,650, reflecting the company’s resilience despite near-term headwinds. The stock’s current valuation and analyst projections indicate a potential 9% upside from average price targets, though near-term challenges from slowing demand in key markets persist.