Latest news with #LRCX
Yahoo
2 days ago
- Business
- Yahoo
Brokers Suggest Investing in Lam Research (LRCX): Read This Before Placing a Bet
When deciding whether to buy, sell, or hold a stock, investors often rely on analyst recommendations. Media reports about rating changes by these brokerage-firm-employed (or sell-side) analysts often influence a stock's price, but are they really important? Before we discuss the reliability of brokerage recommendations and how to use them to your advantage, let's see what these Wall Street heavyweights think about Lam Research (LRCX). Lam Research currently has an average brokerage recommendation (ABR) of 1.63, on a scale of 1 to 5 (Strong Buy to Strong Sell), calculated based on the actual recommendations (Buy, Hold, Sell, etc.) made by 30 brokerage firms. An ABR of 1.63 approximates between Strong Buy and Buy. Of the 30 recommendations that derive the current ABR, 19 are Strong Buy and three are Buy. Strong Buy and Buy respectively account for 63.3% and 10% of all recommendations. Check price target & stock forecast for Lam Research here>>>While the ABR calls for buying Lam Research, it may not be wise to make an investment decision solely based on this information. Several studies have shown limited to no success of brokerage recommendations in guiding investors to pick stocks with the best price increase potential. Do you wonder why? As a result of the vested interest of brokerage firms in a stock they cover, their analysts tend to rate it with a strong positive bias. According to our research, brokerage firms assign five "Strong Buy" recommendations for every "Strong Sell" recommendation. This means that the interests of these institutions are not always aligned with those of retail investors, giving little insight into the direction of a stock's future price movement. It would therefore be best to use this information to validate your own analysis or a tool that has proven to be highly effective at predicting stock price movements. Zacks Rank, our proprietary stock rating tool with an impressive externally audited track record, categorizes stocks into five groups, ranging from Zacks Rank #1 (Strong Buy) to Zacks Rank #5 (Strong Sell), and is an effective indicator of a stock's price performance in the near future. Therefore, using the ABR to validate the Zacks Rank could be an efficient way of making a profitable investment decision. In spite of the fact that Zacks Rank and ABR both appear on a scale from 1 to 5, they are two completely different measures. The ABR is calculated solely based on brokerage recommendations and is typically displayed with decimals (example: 1.28). In contrast, the Zacks Rank is a quantitative model allowing investors to harness the power of earnings estimate revisions. It is displayed in whole numbers -- 1 to 5. It has been and continues to be the case that analysts employed by brokerage firms are overly optimistic with their recommendations. Because of their employers' vested interests, these analysts issue more favorable ratings than their research would support, misguiding investors far more often than helping them. In contrast, the Zacks Rank is driven by earnings estimate revisions. And near-term stock price movements are strongly correlated with trends in earnings estimate revisions, according to empirical research. Furthermore, the different grades of the Zacks Rank are applied proportionately across all stocks for which brokerage analysts provide earnings estimates for the current year. In other words, at all times, this tool maintains a balance among the five ranks it assigns. There is also a key difference between the ABR and Zacks Rank when it comes to freshness. When you look at the ABR, it may not be up-to-date. Nonetheless, since brokerage analysts constantly revise their earnings estimates to reflect changing business trends, and their actions get reflected in the Zacks Rank quickly enough, it is always timely in predicting future stock prices. Looking at the earnings estimate revisions for Lam Research, the Zacks Consensus Estimate for the current year has increased 0.5% over the past month to $4. Analysts' growing optimism over the company's earnings prospects, as indicated by strong agreement among them in revising EPS estimates higher, could be a legitimate reason for the stock to soar in the near term. The size of the recent change in the consensus estimate, along with three other factors related to earnings estimates, has resulted in a Zacks Rank #2 (Buy) for Lam Research. You can see the complete list of today's Zacks Rank #1 (Strong Buy) stocks here >>>> Therefore, the Buy-equivalent ABR for Lam Research may serve as a useful guide for investors. Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Lam Research Corporation (LRCX) : Free Stock Analysis Report This article originally published on Zacks Investment Research ( Zacks Investment Research Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
Yahoo
29-05-2025
- Business
- Yahoo
Lam Research Corporation (LRCX): A Bull Case Theory
We came across a bullish thesis on Lam Research Corporation (LRCX) on Substack by The Antifragile Investor. In this article, we will summarize the bulls' thesis on LRCX. Lam Research Corporation (LRCX)'s share was trading at $82.79 as of 21st May. LRCX's trailing and forward P/E were 23.06 and 19.01 respectively according to Yahoo Finance. An aerial view of a semiconductor factory, with its intricate machinery and equipment. Lam Research has emerged as an indispensable player in the semiconductor ecosystem, quietly powering the atomic-level processes—etching, deposition, and cleaning—that enable the most advanced chips in the world. These tools are not interchangeable; they are engineered for ultra-precise tasks that, once integrated into fabs, become irreplaceable due to high switching costs and time-to-yield sensitivities. With platforms like Kiyo, Altus, and DV-Prime supporting logic, memory, and 3D NAND production, Lam's tools are deeply embedded across global chipmakers including TSMC, Samsung, and Micron. More than just a hardware supplier, Lam has transformed into a high-margin service powerhouse. Services like parts, upgrades, and productivity solutions now account for over 40% of revenue and carry significantly higher margins, lifting gross profit to an impressive 47.3% despite broader industry headwinds. These recurring revenues expand naturally as the installed base grows, creating a self-reinforcing flywheel. The company's dominance is further cemented by a fortress of moats: thousands of patents, heavy R&D investment ($1.9B in 2023), a vast global support network, and near-impossible switching costs. Even geopolitical risks underscore Lam's value, as 42% of sales now come from China—despite export controls—highlighting just how essential its tools are to domestic fabs. Beyond the technology, Lam thrives because every leap in chip complexity demands more tools per wafer, ensuring its relevance grows with every innovation wave from AI to cloud computing. Investors often overlook Lam's embedded software, service flywheel, and strategic positioning—but those who understand its quiet control over semiconductor manufacturing see a company compounding strength in the background of the digital world. Lam Research Corporation (LRCX) is not on our list of the 30 Most Popular Stocks Among Hedge Funds. As per our database, 84 hedge fund portfolios held LRCX at the end of the fourth quarter which was 58 in the previous quarter. While we acknowledge the risk and potential of LRCX as an investment, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns, and doing so within a shorter timeframe. If you are looking for an AI stock that is more promising than LRCX but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock. READ NEXT: 8 Best Wide Moat Stocks to Buy Now and 30 Most Important AI Stocks According to BlackRock. Disclosure: None. This article was originally published at Insider Monkey.
Yahoo
28-05-2025
- Business
- Yahoo
Lam Research Gains 18% in a Month: Should You Buy the Stock Now?
Lam Research Corporation LRCX has seen its share price soar 18.4% over the past month. This surge has significantly outperformed the broader Zacks Computer and Technology Sector, which gained 11% during the same period. Image Source: Zacks Investment Research This outperformance raises the question: Should investors accumulate the stock or book profits and exit the investment? Lam's recent surge has been driven in part by improving sentiment around U.S.-China trade. Reports of a temporary tariff rollback between the two nations have reassured markets. The United States agreed to reduce tariffs on Chinese imports to 30% from 145%, while China will cut duties on U.S. goods from 125% to 10%. These new terms will be in place for 90 days. The temporary trade truce revived hopes for smoother international trade and strengthened confidence in the economic outlook. As fears of escalating trade disruptions faded, equities, particularly in the tech and semiconductor sectors, rallied sharply. Apart from Lam Research, this broader market optimism also boosted the share prices of other semiconductor players, including NVIDIA NVDA, Broadcom AVGO and Advanced Micro Devices AMD. Over the past month, shares of NVIDIA, Broadcom and Advanced Micro Devices have soared 24.3%, 23.4% and 19.3%, respectively. Lam Research's long-term growth potential, along with invigorated investor optimism, makes the stock worth buying at the moment. Lam Research is well-positioned to benefit from the rising demand for artificial intelligence (AI) and datacenter chips. These chips require highly advanced fabrication processes, and LRCX provides the critical deposition and etching technologies that make this possible. In 2024, Lam Research shipped more than $1 billion in products for next-gen chip nodes and packaging. Management expects this figure to triple by 2025. The industry's move toward technologies like backside power distribution and dry-resist processing plays directly into LRCX's strengths. As capital investment in AI accelerates, Lam Research stands to benefit from being a key enabler of that buildout. Lam Research's continued investment in research & development and product innovation is paying off. Its Cryo 3.0 technology has set new performance benchmarks, giving it a competitive edge. Meanwhile, the Aether dry-resist system is gaining adoption, especially for memory applications like high-bandwidth DRAM. Expanding its manufacturing base in Asia has also helped the company improve margins and efficiency. In the third quarter of fiscal 2025, Lam Research's non-GAAP operating margin rose to 32.8%, up 210 basis points year over year. That's impressive, considering the challenges across the broader semiconductor market. Lam Research's latest financial results for the third quarter of fiscal 2025 confirm its ability to execute well even in uncertain times. Revenues rose 24.5% year over year to $4.72 billion, while non-GAAP EPS (adjusted for the stock split) jumped 33.5%. Strong demand from memory and logic customers, along with tight cost control, helped the company beat expectations on both the top and bottom lines. Lam Research Corporation price-consensus-eps-surprise-chart | Lam Research Corporation Quote Lam Research's consistent performance reinforces investor trust in its long-term business model and earnings stability. The stock has an impressive history of beating earnings estimates. LRCX surpassed the Zacks Consensus Estimate for earnings in each of the trailing four quarters, the average surprise being 6.1%. Despite the recent rally, Lam Research stock remains reasonably priced. LRCX currently trades at a forward price-to-earnings (P/E) ratio of 21.17, which is significantly lower than the sector's 25.72. The company's discounted valuation multiple aligns with its long-term growth potential. Image Source: Zacks Investment Research The stock's P/E ratio is also lower than major semiconductor players, including Advanced Micro Devices, NVIDIA and Broadcom. At present, Advanced Micro Devices, NVIDIA and Broadcom have forward 12-month P/E multiples of 24.24X, 29.73X and 32.19X, respectively. Lam Research's discounted valuation, solid financial performance and strategic focus on AI-driven growth make it a compelling investment option right now. The company's expanding market share in AI and datacenter fabrication, coupled with innovative product launches, strengthens its competitive positioning. LRCX carries a Zacks Rank #2 (Buy) at present. You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here. Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Advanced Micro Devices, Inc. (AMD) : Free Stock Analysis Report NVIDIA Corporation (NVDA) : Free Stock Analysis Report Lam Research Corporation (LRCX) : Free Stock Analysis Report Broadcom Inc. (AVGO) : Free Stock Analysis Report This article originally published on Zacks Investment Research ( Zacks Investment Research Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
Globe and Mail
28-05-2025
- Business
- Globe and Mail
Lam Research Gains 18% in a Month: Should You Buy the Stock Now?
Lam Research Corporation LRCX has seen its share price soar 18.4% over the past month. This surge has significantly outperformed the broader Zacks Computer and Technology Sector, which gained 11% during the same period. This outperformance raises the question: Should investors accumulate the stock or book profits and exit the investment? Trade Truce Ignites Rally in LRCX Shares Lam's recent surge has been driven in part by improving sentiment around U.S.-China trade. Reports of a temporary tariff rollback between the two nations have reassured markets. The United States agreed to reduce tariffs on Chinese imports to 30% from 145%, while China will cut duties on U.S. goods from 125% to 10%. These new terms will be in place for 90 days. The temporary trade truce revived hopes for smoother international trade and strengthened confidence in the economic outlook. As fears of escalating trade disruptions faded, equities, particularly in the tech and semiconductor sectors, rallied sharply. Apart from Lam Research, this broader market optimism also boosted the share prices of other semiconductor players, including NVIDIA NVDA, Broadcom AVGO and Advanced Micro Devices AMD. Over the past month, shares of NVIDIA, Broadcom and Advanced Micro Devices have soared 24.3%, 23.4% and 19.3%, respectively. Lam Research's long-term growth potential, along with invigorated investor optimism, makes the stock worth buying at the moment. AI and Datacenter Demand Support LRCX's Long-Term Upside Lam Research is well-positioned to benefit from the rising demand for artificial intelligence (AI) and datacenter chips. These chips require highly advanced fabrication processes, and LRCX provides the critical deposition and etching technologies that make this possible. In 2024, Lam Research shipped more than $1 billion in products for next-gen chip nodes and packaging. Management expects this figure to triple by 2025. The industry's move toward technologies like backside power distribution and dry-resist processing plays directly into LRCX's strengths. As capital investment in AI accelerates, Lam Research stands to benefit from being a key enabler of that buildout. Strategic Investments Are Paying Off for Lam Research Lam Research's continued investment in research & development and product innovation is paying off. Its Cryo 3.0 technology has set new performance benchmarks, giving it a competitive edge. Meanwhile, the Aether dry-resist system is gaining adoption, especially for memory applications like high-bandwidth DRAM. Expanding its manufacturing base in Asia has also helped the company improve margins and efficiency. In the third quarter of fiscal 2025, Lam Research's non-GAAP operating margin rose to 32.8%, up 210 basis points year over year. That's impressive, considering the challenges across the broader semiconductor market. Lam Research's Solid Financials Highlight Strength Lam Research's latest financial results for the third quarter of fiscal 2025 confirm its ability to execute well even in uncertain times. Revenues rose 24.5% year over year to $4.72 billion, while non-GAAP EPS (adjusted for the stock split) jumped 33.5%. Strong demand from memory and logic customers, along with tight cost control, helped the company beat expectations on both the top and bottom lines. Lam Research's consistent performance reinforces investor trust in its long-term business model and earnings stability. The stock has an impressive history of beating earnings estimates. LRCX surpassed the Zacks Consensus Estimate for earnings in each of the trailing four quarters, the average surprise being 6.1%. LRCX Stock Looks Attractive on the Valuation Front Despite the recent rally, Lam Research stock remains reasonably priced. LRCX currently trades at a forward price-to-earnings (P/E) ratio of 21.17, which is significantly lower than the sector's 25.72. The company's discounted valuation multiple aligns with its long-term growth potential. The stock's P/E ratio is also lower than major semiconductor players, including Advanced Micro Devices, NVIDIA and Broadcom. At present, Advanced Micro Devices, NVIDIA and Broadcom have forward 12-month P/E multiples of 24.24X, 29.73X and 32.19X, respectively. Conclusion: Buy Lam Research Stock for Now Lam Research's discounted valuation, solid financial performance and strategic focus on AI-driven growth make it a compelling investment option right now. The company's expanding market share in AI and datacenter fabrication, coupled with innovative product launches, strengthens its competitive positioning. LRCX carries a Zacks Rank #2 (Buy) at present. You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here. Only $1 to See All Zacks' Buys and Sells We're not kidding. Several years ago, we shocked our members by offering them 30-day access to all our picks for the total sum of only $1. No obligation to spend another cent. Thousands have taken advantage of this opportunity. Thousands did not - they thought there must be a catch. Yes, we do have a reason. We want you to get acquainted with our portfolio services like Surprise Trader, Stocks Under $10, Technology Innovators, and more, that closed 256 positions with double- and triple-digit gains in 2024 alone. See Stocks Now >> Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Advanced Micro Devices, Inc. (AMD): Free Stock Analysis Report NVIDIA Corporation (NVDA): Free Stock Analysis Report Lam Research Corporation (LRCX): Free Stock Analysis Report Broadcom Inc. (AVGO): Free Stock Analysis Report
Globe and Mail
21-05-2025
- Business
- Globe and Mail
Should You Buy, Sell or Hold Applied Materials Stock Post Q2 Earnings?
Applied Materials AMAT shares have lost 5.3% since it reported financial results for the second quarter of fiscal 2025 on May 15. Though the company's second-quarter top and bottom lines surpassed the Zacks Consensus Estimate, declining revenues in the Chinese market weighed on the investors' sentiments. The year 2025 has remained highly volatile for AMAT stock, with its share price rising mere 1.9% year to date. The stock has also underperformed other semiconductor players, including Lam Research LRCX, KLA Corporation KLAC and ASML Holding ASML. The underperformance of AMAT's share price, along with concerns related to China sales prospects, raises the question: Should investors buy, hold or sell AMAT stock? Declining China Sales: A Key Concern for AMAT's Prospects A major headwind for Applied Materials is increasing U.S.-China tensions and export restrictions on semiconductor manufacturing equipment. China remains a crucial market for Applied Materials, accounting for a significant portion of total revenues. However, U.S. government restrictions on selling advanced semiconductor equipment to Chinese manufacturers are hurting Applied Materials' sales and growth outlook. In the second quarter of fiscal 2025, Applied Materials' China sales plunged 37.3% year over year to $1.77 billion. China market's contribution to total revenues also shrank to 25% from the year-ago quarter's 43%. This marked the third consecutive quarter of a year-over-year fall in China revenues. Earlier, management had acknowledged that the company faces elevated uncertainty in China due to ongoing geopolitical tensions and regulatory scrutiny. If stricter export controls are imposed, Applied Materials' long-term revenue potential could take a hit, as Chinese chipmakers are forced to turn to domestic alternatives or non-U.S. suppliers. However, despite the headwinds, AMAT has several upsides that enable the company to perform well. AMAT Leads the Market With Superior Technology Applied Materials is well-positioned to capitalize on the demand for AI-driven semiconductors that has become the driving force for this industry. AMAT has made significant strides in cutting-edge chip manufacturing, particularly in gate-all-around (GAA) transistors, high-bandwidth memory and advanced packaging. These innovations are critical to enabling faster, more energy-efficient AI processing. Applied Materials' revenues from advanced semiconductor nodes surpassed $2.5 billion in fiscal 2024, and management expects this figure to double in fiscal 2025. The transition from FinFET to GAA transistors is expanding AMAT's total addressable market by 15%, while Applied Materials' revenues in this segment are projected to grow 30% per wafer fab capacity expansion. The company is also on track to secure more than 50% of the market share in GAA and backside power delivery, solidifying its leadership in the AI computing era. The advanced packaging segment has become an increasingly critical part of Applied Materials' business, with revenues tripling over the past four years to $1.7 billion in fiscal 2024. AMAT has secured volume orders from leading-edge customers for its Integrated Hybrid Bonding technology, strengthening its position in next-generation chip manufacturing. The upcoming EPIC Center in Silicon Valley, expected to go live in 2026, will further drive innovation in semiconductor packaging and process technology. In its most recent earnings report, AMAT highlighted that the company is well-positioned to gain from demand growth in gate-all-around transistors, backside power delivery, and high-bandwidth memory. Applied Materials' gross margins hit 49.2% in the second quarter of fiscal 2025, which was the highest since 2000. Moreover, the company expects its advanced DRAM revenues to grow more than 40% in 2025, driven by DDR5 and HBM. Due to all these positive factors, analysts are optimistic about the stock's future growth. The Zacks Consensus Estimate for fiscal 2025 and 2026 revenues is projected to grow 5.96% and 5.7%, respectively. The Zacks Consensus Estimate for 2025 and 2026 earnings is projected to grow 9.2% and 5%, respectively. Applied Materials is on track to sustain its momentum. Additionally, the company has consistently outperformed earnings expectations, delivering an average surprise of 4.94% over the last four quarters, reflecting its strong execution capabilities. AMAT's Valuation Offers Upside Potential Applied Materials is trading at a 12-month forward P/E ratio of 17.09, significantly below the industry average of 25.5. Given its dominance in semiconductor equipment and AI-driven chip manufacturing, this valuation discount suggests strong upside potential over the long term. Applied Materials is also trading at a lower P/E multiple than other semiconductor companies, including Lam Research, KLA Corporation and ASML Holding. Currently, Lam Research, KLA Corporation and ASML Holding have a P/E multiple of 21.25X, 24.1X and 26.2X, respectively. Applied Materials Forward 12 Months (P/E) Valuation Chart Conclusion: Hold AMAT for Now Applied Materials remains a key player in semiconductor manufacturing, with a strong position in AI-driven chip development, advanced packaging and next-generation process technology. For investors, retaining AMAT is the best approach. Currently, Applied Materials carries a Zacks Rank #3 (Hold). You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here. Zacks Names #1 Semiconductor Stock It's only 1/9,000th the size of NVIDIA which skyrocketed more than +800% since we recommended it. NVIDIA is still strong, but our new top chip stock has much more room to boom. With strong earnings growth and an expanding customer base, it's positioned to feed the rampant demand for Artificial Intelligence, Machine Learning, and Internet of Things. Global semiconductor manufacturing is projected to explode from $452 billion in 2021 to $803 billion by 2028. See This Stock Now for Free >> Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report KLA Corporation (KLAC): Free Stock Analysis Report ASML Holding N.V. (ASML): Free Stock Analysis Report Lam Research Corporation (LRCX): Free Stock Analysis Report Applied Materials, Inc. (AMAT): Free Stock Analysis Report
