Morgan Stanley Downgrades Lam Research (LRCX) to Underweight

Morgan Stanley’s Shane Brett cut Lam Research (LRCX) to Underweight from Equal-Weight, trimming the price target to $92 from $94. The move reflects concerns about a sharp slowdown in NAND flash memory growth and weakening demand momentum in China heading into 2026.

• System shipment growth expected to fall from +82% in 2025 to just +3% in 2026 as capacity buildouts taper off.
• U.S. export restrictions on chip equipment add uncertainty to China growth.

Despite the downgrade, LRCX is up over 30% YTD, outpacing the broader semiconductor sector. Street sentiment remains more constructive, with average 12-month targets implying ~12–13% upside.

Key watchpoints: NAND demand cycle, U.S.–China trade policy, and equipment spending trends.