Applied Materials vs Lam Research
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KIRA’s take AI analyst
I put Applied Materials and Lam Research side by side, using each one’s latest annual report. Here is what stands out:
- Applied Materials is the larger business, with $28.4B of revenue in fiscal 2025 against $23.2B for Lam Research.
- Lam Research grew revenue faster (26.0%, against 4.4%).
- Lam Research kept more of each dollar of sales as operating profit (35.3% operating margin, against 29.2%).
- Lam Research turned more of its sales into free cash flow (21.1% FCF margin, against 20.1%).
- Lam Research earned a higher return on the capital invested in it (77.7%, against 35.9%).
- Investors pay more for each dollar of Lam Research’s earnings: a P/E of 35.4x against 33.4x for Applied Materials.
Who comes out ahead
Of the 11 measures where higher (or lower) is clearly better, how many each company leads.
Applied Materials
AMAT
3/11
5-year growthNet debt / EBITDAShare count change
Lam Research
LRCX
8/11
Revenue growthGross marginOperating marginNet marginFCF marginReturn on capitalReturn on equityPiotroski F-score
Side by side
Best in the row
| Latest fiscal year | AMAT FY25 | LRCX FY26 |
|---|---|---|
| Size | ||
| Market cap | $310.1B | $298.3B |
| Revenue | $28.4B | $23.2B |
| Free cash flow | $5.7B | $4.9B |
| Net income | $7.0B | $7.3B |
| Growth | ||
| Revenue growth | 4.4% | 26.0% |
| 5-year growth | 10.5% | 9.7% |
| Share count change | −3.1% | −2.3% |
| Profitability | ||
| Gross margin | 48.7% | 50.5% |
| Operating margin | 29.2% | 35.3% |
| Net margin | 24.7% | 31.3% |
| FCF margin | 20.1% | 21.1% |
| Return on capital | 35.9% | 77.7% |
| Return on equity | 35.5% | 65.1% |
| Balance sheet | ||
| Net debt | −$2.0B | −$1.9B |
| Net debt / EBITDA | −0.2x | −0.2x |
| Dividends and buybacks | $6.3B | $5.1B |
| Valuation & quality | ||
| P/E | 33.4x | 35.4x |
| Piotroski F-score | 7 | 8 |
Ten years
Revenue
Operating margin
Free cash flow
Return on capital
Each company's latest fiscal year; fiscal years end in different months. The best value in each row is highlighted where higher (or lower) is clearly better. Not investment advice.