Morgan Stanley is turning bearish on Lam Research . The bank downgraded the semiconductor stock to underweight rating from equal weight. Analyst Shane Brett accompanied the move by cutting his price target to $92 from $94, signaling 8% downside from Friday’s close. While Lam Research outperformed in 2024 and 2025, Brett doesn’t expect this growth to sustain into next year. One of the company’s biggest growth drivers was its outperformance in the China marketplace, but Brett believes that further share gain looks “tough” from here. LRCX YTD mountain LRCX YTD chart “We don’t think there is anything fundamentally wrong with LAM; it’s just hard to see LAM outgrowing WFE [water fab equipment market] in 2026, and expect relative share performance to lag as a result,” Brett wrote. “Despite our appreciation for LAM’s NAND story (25pt share gain over the last decade), end-markets just aren’t robust enough to drive further growth for LAM and NAND WFE. We expect growth to decelerate from 82% in 2025 to 3% in 2026.” Ultimately, the analyst expects a “challenging 2026 setup” to weigh shares of Lam Research down, making the stock a “relatively under performer” among other U.S. large caps. Shares of Lam Research have surged 29% this year. However, the stock lost 4% in the premarket following the downgrade.
