Lam Research delivered a robust QQ1 2026 performance, underscored by record quarterly revenue of $5.324 billion, gross margin of 50.4% (50.6% in the transcript reference), and a post-Novelty era record operating margin of 35%. Management framed the quarter as evidence of Lam’s enduring leadership in deposition and etch, driven by AI-related data-center demand and NAND upgrade activity. The company reinforced a constructive 2026 WFE outlook, highlighting a sizable AI-infrastructure spend translating into continued Smith-Pac growth in leading-edge foundry logic, DRAM, and NAND-upgrade spending, while also acknowledging a meaningful China revenue headwind from policy actions. Free cash flow remained exceptionally strong at approximately $1.59 billion for the quarter, with sizable buybacks (~$990 million) and a dividend (~$292 million) supporting shareholder value. Lam explicitly guided for a December 2025 quarter revenue of $5.2 billion ± $0.3 billion with a gross margin around 48.5% and a 33% operating margin, plus an EPS of $1.15 ± $0.10, reflecting a second-half–weighted year and a higher tax rate in 2026. The company also signaled a strategic export of growth from CSBG (spares, upgrades, and services) and advanced packaging (SABER, Cindian etch) as AI spend broadens the application envelope. In a Macro view, Lam’s leverage to the AI and data-center cycle remains compelling, yet the company faces notable regulatory risk in China (affiliate-rule headwinds, reduced China share) and near-term tariff headwinds. Overall, Lam’s QQ1 outcome reinforces a constructive long-term thesis around outsize WFE growth driven by deposition/etch intensity and AI-inflected demand, with the near-term caveat of geopolitical/regulatory and tax-rate headwinds.