By Tae Kim

After a big rally in Lam Research's stock price, Morgan Stanley says investors can find better opportunities elsewhere.

On Sunday, analyst Shane Brett lowered his rating for Lam Research stock to Underweight from Equal-weight. He reduced his price target slightly to $92 from $94.

"We aren't confident about NAND [flash memory market] and China growth into 2026," he wrote. The "end-markets just aren't robust enough to drive further growth."

In midday trading Tuesday, Lam Research shares were down 3.7% to $96.47. The company did not immediately respond to a request for comment on the report. The stock has still risen more than 30% this year.

The analyst predicts the chip-equipment market for flash memory will slow down from 102% growth this year to 9% growth next year as memory factory capacity upgrades get digested.

"We assume part of the 2025 strength came at the expense of 2026," he wrote.

Lam shares have risen by about 33% this year, compared to the 11% gain for the iShares Semiconductor exchanged-traded fund.

Write to Tae Kim at tae.kim@barrons.com

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September 02, 2025 16:06 ET (20:06 GMT)

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