W.027Lam’s $25B buyback is 11% of its value after a 16% fall, and five years of last year’s free cash flow
Lam Research authorized up to $25B of share repurchases after the close on November 5, the day its shares fell 16.4% to $185.20 in the chip selloff. That is 2.5 times its 2024 authorization and about 11% of its market value at the close. It is also about 5.1 years of the $4.89B of free cash flow Lam generated in its fiscal year to June, though Lam generated $3.24B in the September quarter alone. Lam had about $3.0B left under its old program and $7.4B of cash.
What Lam authorized
The authorization is 2.5 times Lam’s last one. Lam’s board approved repurchases of up to $25 billion, which supplements what remained of its previous program and has no end date; it can be suspended at any time. Lam authorized up to $10 billion in May 2024 and up to $5 billion in May 2022. It had $3.03B left under its existing repurchase authorizations at September 27, its 10-Q shows, so its total remaining capacity is about $28.0B if it bought no stock after that date, which the filings do not show. The board also declared a quarterly dividend of $0.33 a share, the rate it set in August when it raised the dividend 27% from $0.26; at the October share count that is about $1.65B a year.
It came at the end of Lam’s worst day since March 2020. The shares fell 16.4% to $185.20 on November 5, their lowest level since early January, as the PHLX Semiconductor Index fell 12.3% after the US midterm elections. At that price, Lam’s 1.249 billion shares were worth about $231.3B, and $25 billion would buy about 10.8% of them. StockTitan reported the shares up 6.26% at 7:58 p.m. New York time.
The new authorization is 2.5 times the last one
Lam Research’s three most recent share repurchase authorizations, $ billions, by the month announced. Each added to whatever remained of the one before.
How Lam could pay for it
At last year’s rate, $25 billion is five years of free cash flow; at this quarter’s, about two. In its fiscal year to June 28, 2026, Lam had $5.86B of operating cash flow and spent $0.97B on capital expenditures and intangibles, leaving $4.89B of free cash flow. It returned $5.12B, 105% of that, in buybacks and dividends. In the September quarter, operating cash flow was $3.50B and free cash flow $3.24B, as revenue rose 22% from the June quarter to $8.22B; Lam returned $1.35B, 42% of it. At the September quarter’s rate, $25 billion is about 7.7 quarters of free cash flow.
The balance sheet carries net cash. Lam held $7.44B of cash and equivalents at September 27 against $3.74B of debt and finance leases, about $3.70B net. It guided to December-quarter revenue of $8.6 billion, plus or minus $400 million. On its October 21 call, management put industry spending on wafer fabrication equipment in the mid-$150 billion range in 2026 and, in a preliminary view, above $200 billion in 2027, according to a MarketBeat summary of the call.
$25 billion against what Lam has and makes
The new authorization next to what was left under the old one and the cash on hand at September 27, 2026; free cash flow (operating cash flow less capital expenditures and intangibles, our calculation) for the fiscal year to June 2026 and for the September quarter; and buybacks plus dividends paid in the fiscal year to June 2026. $ billions.
Lam returned more than its free cash flow last year
Free cash flow (our calculation, left bar of each pair) and cash returned to shareholders (right bar: buybacks and dividends), $ billions, for Lam’s fiscal year to June 28, 2026 and the quarter to September 27, 2026.
Data
| $ thousands | Year to Jun 2026 | Quarter to Sep 2026 |
|---|---|---|
| Revenue | 23,232,690 | 8,219,418 |
| Operating cash flow | 5,857,657 | 3,497,652 |
| Capital expenditures and intangibles | 966,405 | 257,697 |
| Free cash flow | 4,891,252 | 3,239,955 |
| Buybacks | 3,851,343 | 1,024,965 |
| Dividends | 1,270,635 | 325,402 |
What this changes on 06.ai
- Pack lead (AI memory balance): Lam’s management sees wafer fab equipment spending rising from the mid-$150 billion range in 2026 to above $200 billion in 2027, with growth led by DRAM; the December-quarter results will show whether that view survived the election.
- Series lead: chip-equipment buybacks as a share of free cash flow (Lam 105% last year) are a gauge of how much cash the build-out leaves its suppliers.
Sources and method
| Item | Figure | Source |
|---|---|---|
| Authorization | Up to $25 billion of repurchases, supplementing the remaining balance of the prior authorization, no termination date; quarterly dividend $0.33, record Dec 2, payable Jan 6, 2027 | Lam release (8-K), Nov 5 |
| Sep quarter | Revenue 8,219,418K; net income 2,753,138K; operating cash flow 3,497,652K; capital expenditures and intangibles 257,697K; repurchases 1,024,965K; dividends 325,402K; 3,032,013K available under the authorization at Sep 27; cash and equivalents 7,437,384K; debt and finance leases 3,731,958K plus 3,486K current; 1,249,171,000 shares as of Oct 20 | Lam 10-Q, quarter to Sep 27, 2026 |
| Guidance | December-quarter revenue guidance $8.60B ± $400M | Lam Q1 FY27 release (8-K), Oct 21 |
| FY2026 | Revenue 23,232,690K; operating cash flow 5,857,657K; capital expenditures and intangibles 966,405K; treasury stock purchases 3,851,343K; dividends 1,270,635K; June-quarter revenue 6,722,238K | Lam Q4 FY26 release (8-K), Jul 29 |
| Dividend | Quarterly dividend raised by $0.07, or 27%, to $0.33 from $0.26 | Lam release, Aug 27 |
| 2024 | Authorization of up to $10 billion, no termination date | Lam release (8-K), May 21, 2024 |
| 2022 | Authorization of up to $5 billion | Lam release (8-K), May 11, 2022 |
| Shares | Closed at $185.20 on Nov 5, down 16.4%, lowest since early January | Rallies.ai, Nov 5 |
| Shares | Lam −16.4%, its worst session since March 2020; semiconductor index −12.3% | Benzinga, via KuCoin, Nov 5 |
| Shares | Up 6.26% after hours at 7:58 p.m. ET | StockTitan market close, Nov 5 |
| Industry | Wafer fab equipment spending in the mid-$150B range in 2026 and more than $200B in 2027, preliminary, growth led by DRAM | MarketBeat call summary, Oct 21 |
Free cash flow: 5,857,657 − 966,405 = 4,891,252; 3,497,652 − 257,697 = 3,239,955 ($ thousands). Returned: 3,851,343 + 1,270,635 = 5,121,978 (104.7% of free cash flow); 1,024,965 + 325,402 = 1,350,367 (41.7%). Buybacks are the cash flow statement’s repurchase lines, which include excise tax.
Market value: $185.20 × 1,249,171,000 = $231.35B; $25,000M ÷ that = 10.8%. The share count is as of October 20. Multiples: 25,000,000 ÷ 4,891,252 = 5.11 years; ÷ 3,239,955 = 7.72 quarters; 25 ÷ 10 = 2.5. Remaining capacity: 25,000,000 + 3,032,013 = 28,032,013. Net cash: 7,437,384 − 3,735,444 = 3,701,940. Dividend: $0.33 × 4 × 1,249,171,000 = $1.65B. Growth: 8,219,418 ÷ 6,722,238 − 1 = 22.3%.
Wire reports are written within hours of the news, on a six-hour schedule. Each lists its sources and shows the arithmetic behind its figures. Not investment advice.