Lam Research Approves Authorization to Repurchase Up to $25 Billion of Shares
Key Facts
Lam Research on November 5, 2026, approved a new authorization to repurchase up to $25 billion of shares and announced a quarterly cash dividend of $0.33 per share, according to a company statement. The authorization adds new capacity to the remaining balance of the previous program, but does not require the company to buy any shares. Chief Financial Officer Doug Bettinger said the move "supports our capital allocation plan and our commitment to returning significant value to shareholders through dividends and repurchases." He added that the company’s positioning at major technology transitions and strong cash generation give it confidence in its ability to meet its capital return goals over time. The announcement thus combines optional capital allocation for repurchases with a specified cash dividend for eligible shareholders.
The program allows purchases in the open market or through privately negotiated transactions, including the use of derivative contracts and structured share repurchase agreements. The authorization has no expiration date, and the company may suspend or discontinue it at any time. Lam said the program does not require it to buy shares, so the $25 billion cap is not a commitment to spend the full amount or a timetable for execution. The new authorization supplements the remaining balance of the previous authorization, without the announcement specifying that balance. These terms leave the company to determine the size, timing and method of purchases.
The $0.33-per-share dividend will be paid on January 6, 2027, to shareholders of record on December 2, 2026, according to the company statement. The record date sets the cutoff for determining which shareholders are eligible for the announced payment. Any future dividends remain subject to review and approval by the board. In fiscal 2026, Lam said it returned $4.7 billion to shareholders through repurchases and dividends, alongside revenue growth of 26% to a record $23.2 billion. Those figures provide context for the decision to continue returning capital, while the new authorization remains separate from the commitment to the current dividend.
The announcement followed a strong operating quarter: Lam’s revenue rose to $8.219 billion in the quarter ended September 27, 2026, from $6.722 billion in the quarter ended June 28, an increase of 22% quarter over quarter. Net income under generally accepted accounting principles was $2.75 billion, compared with $2.28 billion in the previous quarter, while diluted earnings per share rose to $2.19 from $1.81, an increase of 21%. Gross margin climbed to 52.3% from 51.7%, and operating margin rose to 40.0% from 37.4%. Chief Executive Tim Archer said rising semiconductor demand and device complexity helped drive record revenue, earnings and earnings per share in the September quarter. The results reflect improved sales and margins compared with the June quarter as the company announces its new capital plan.
Cash, cash equivalents and restricted cash rose to $7.45 billion at the end of the September quarter, from $5.60 billion at the end of the June quarter. The company attributed the increase mainly to cash generated from operating activities, after accounting for capital returns and capital expenditures. By revenue source, systems revenue was $5.733 billion in the September quarter, compared with $4.250 billion in June, while customer support and services revenue was $2.487 billion, compared with $2.472 billion. A large share of revenue came from Asia, with China accounting for 35% of quarterly revenue, Korea 20% and Taiwan 18%. These figures show expanding liquidity and growth in systems sales, alongside the company’s exposure to Asian chipmaking markets.
Management, however, pointed to supply constraints limiting the industry’s ability to meet demand. Bettinger said December revenue guidance "would have been a little higher were it not for some near-term supply chain constraints." He added that the constraints involve specific components, and that demand is consistent, with no isolated or exceptional factors explaining the guidance. The chief executive said cleanroom availability and constraints on certain components would continue to limit chipmakers’ and semiconductor equipment companies’ ability to fully meet end demand during 2027. In its guidance for the quarter ending December 27, 2026, Lam set revenue at $8.60 billion, plus or minus $400 million, and diluted earnings per share at $2.33, plus or minus $0.15. The outlook places supply constraints at the center of the near-term view despite the revenue growth recorded in the September quarter.
In trading on November 5, Lam Research shares fell 12.1% in morning trading as semiconductor stocks broadly declined after Qualcomm issued a weaker-than-expected earnings forecast, according to Investing.com coverage. The report also linked the pressure to concerns about artificial intelligence infrastructure spending and the chip supply chain. The company’s shares closed at $221.43 on November 4 and $185.2 on November 5, according to EL7 data. Those closing prices track the stock around the announcement date, while the decline coincided with broader sector pressure and is not attributed here solely to the authorization. The program authorizes repurchases, while the board has announced no timetable for the purchases.