Lam Research’s 4.29% Slide Amid China-Driven Revenue Surge and Skepticism as Volume Surges to $2.6B 38th in Activity

Lam Research (LRCX) fell 4.29% on July 31, 2025, despite reporting stronger-than-expected earnings and raising full-year guidance. The stock’s decline followed mixed investor reactions to its China-driven revenue surge and concerns about sustainability. Trading volume surged to $2.6 billion, a 108.57% increase from the prior day, ranking it 38th in market activity.

The company’s fiscal Q4 results showed adjusted earnings of $1.33 per share and revenue of $5.17 billion, exceeding Wall Street forecasts. It raised its 2025 wafer fabrication equipment (WFE) market forecast to $105 billion from $100 billion, citing robust demand from Chinese clients, which accounted for 35% of second-quarter revenue. Analysts highlighted China’s outsized role in Lam’s performance, with deferred revenue jumping $700 million sequentially, signaling a growing order backlog linked to the region.

However, skepticism emerged as investors questioned whether the China-driven momentum represented structural growth or a temporary spike. Summit Insights downgraded LRCX to Hold from Buy, citing limited catalysts beyond 2025 and a potential moderation in WFE spending in 2026. While NAND and advanced foundry demand supported near-term upside, analysts warned of a likely slowdown in memory investments and weaker visibility in logic markets. Lam’s guidance for Q1 2026 revenue of $4.9–$5.5 billion also raised concerns about a potential revenue pullback in the fourth quarter.

The strategy of purchasing the top 500 stocks by daily trading volume and holding them for one day delivered a 166.71% return from 2022 to the present. This outperformed the benchmark return of 29.18%, generating an excess return of 137.53%. The success of this approach reflects the influence of high-liquidity stocks in driving short-term market movements, as seen in significant volume surges for equities like VICI Properties and Eli Lilly.