Lam Research Plunges 5.75% Amid AI-Driven Foundry Optimism and CEO Share Sale

Summary
• Lam Research’s Q1 2026 Systems revenue surged 48.3% to $3.55 billion, driven by AI-driven foundry demand.
• CEO Timothy Archer files to sell 163,300 shares via a prearranged 10b5-1 plan.
• LRCX’s 6-month price return outperformed the sector by 46% (77% vs. 31%).

Lam Research (LRCX) is trading at $153.87, down 5.75% intraday, with a sharp selloff from its $164.52 high. The stock’s decline coincides with CEO share sales and mixed market sentiment, despite robust earnings and AI-driven demand tailwinds. Investors are weighing short-term volatility against long-term growth catalysts.

CEO Share Sale Sparks Market Jitters Amid AI-Driven Optimism
The selloff in LRCX is directly tied to CEO Timothy Archer’s filing to sell 163,300 shares under a prearranged 10b5-1 trading plan. While such sales are routine, the timing—amid a 5.75% intraday drop—has amplified bearish sentiment. The market is also parsing mixed signals: Lam’s Q1 2026 Systems revenue growth (48.3% YoY) and strong AI-driven foundry demand contrast with recent insider sales and a 7.24% drop in the 149-strike put’s intrinsic value. The stock’s 52-week high of $169.69 and 30.8 P/E ratio suggest valuation concerns are emerging despite fundamentals.

Semiconductor Equipment Sector Volatile as LRCX Dips
The Semiconductor Equipment & Materials sector is under pressure, with Applied Materials (AMAT) down 4.43% and KLA (KLAC) down 3.95%. LRCX’s 5.75% drop aligns with sector weakness, driven by profit-taking after a 77% 6-month rally and macroeconomic uncertainty. The sector’s 67.76% YTD return outpaces the S&P 500 but faces near-term profit-taking risks as AI-driven demand growth moderates.

Options Playbook: Capitalizing on Volatility with LRCX Puts
• 200-day MA: $107.29 (far below current price)
• RSI: 65.09 (neutral to overbought)
• MACD: 3.86 (bullish divergence)
• Bollinger Bands: $139.76–$173.23 (current price near lower band)

LRCX’s technicals suggest a bearish short-term setup. Key support levels at $154.73 (30D) and $98.55 (200D) are critical. The stock’s 5.75% drop has triggered increased put activity, with the 145-strike and 148-strike puts offering high leverage and liquidity.

Top Option 1: LRCX20251226P145
• Contract Code: LRCX20251226P145
• Type: Put
• Strike Price: $145
• Expiration: 2025-12-26
• IV: 51.87% (moderate)
• LVR: 91.97% (high leverage)
• Delta: -0.2135 (moderate sensitivity)
• Theta: -0.0691 (rapid time decay)
• Gamma: 0.0219 (high sensitivity to price swings)
• Turnover: $4,567
• Payoff (5% downside): $10.15
This put offers a 66% return if LRCX drops to $146.23 (5% downside), with high gamma amplifying gains in a volatile move.

Top Option 2: LRCX20251226P148
• Contract Code: LRCX20251226P148
• Type: Put
• Strike Price: $148
• Expiration: 2025-1226
• IV: 48.12% (moderate)
• LVR: 70.55% (high leverage)
• Delta: -0.2767 (moderate sensitivity)
• Theta: -0.0453 (moderate time decay)
• Gamma: 0.0272 (high sensitivity to price swings)
• Turnover: $10,514
• Payoff (5% downside): $14.15
This put provides a 92% return if LRCX falls to $146.23, with strong gamma and liquidity for aggressive bearish bets.

Hook: If $154.73 support breaks, LRCX20251226P145 offers a high-leverage play on a 5% downside.

Backtest Lam Research Stock Performance
The backtest of LRCX's performance after a -6% intraday plunge from 2022 to now shows favorable results. The 3-Day win rate is 55.39%, the 10-Day win rate is 55.39%, and the 30-Day win rate is 61.73%. This indicates that the stock tends to rebound in the short term following a significant drop. The maximum return during the backtest period was 8.63% over 30 days, suggesting that while there is some volatility, LRCX can offer positive returns in the medium term after a sharp decline.

Act Now: Position for LRCX's Near-Term Volatility
LRCX’s 5.75% drop reflects short-term profit-taking and CEO share sales, but fundamentals remain intact with AI-driven foundry demand surging. The stock’s 30.8 P/E ratio and 22.3% Systems revenue growth suggest long-term resilience. However, near-term volatility is likely as the market digests mixed signals. Watch for a breakdown below $154.73 or a rebound above $164.52. Sector leader AMAT (-4.43%) highlights sector-wide jitters, but LRCX’s options offer tactical entry points for directional bets. Aggressive bears should prioritize the 145-strike put if $154.73 breaks.