Core Viewpoint - The AI boom is benefiting the economy and investor portfolios, but popular stocks appear expensive, leading to a search for overlooked opportunities in smaller AI stocks [1] Group 1: Investment Opportunities - UBS managing director Tim Arcuri identifies several under-the-radar AI stocks that are gaining attention, including Micron, Lam Research, and Terydyne [2][8][10] - Micron, a memory storage device manufacturer, is expected to experience growth as it stabilizes its business model away from cyclical trends, despite a weak chip demand forecast [3][4] - Lam Research, a semiconductor equipment producer, is favored by Arcuri due to its strong share price rally and potential benefits from a weaker US dollar in 2025 [8] - Terydyne, which produces automated test equipment for semiconductors, is positioned to play a crucial role in the next phase of the AI boom, with limited competition in its niche [10] Group 2: Market Dynamics - The demand for computing power driven by AI hyperscalers is expected to surge, leading to significant increases in required compute and memory capacity [9] - Arcuri emphasizes the substantial financial implications of this demand, suggesting that the market may not fully grasp the scale of investment needed in semiconductor equipment [9]

Group 1 - Lam Research Corporation (NASDAQ: LRCX) is entering fiscal 2026 with the wafer-fab equipment cycle still recovering [1] - The company has a historical focus on memory, which is expected to be beneficial in the upcoming quarters as memory demand increases [1]

Core Insights - Lam Research Corp. (LRCX) achieved a strong 30% free cash flow (FCF) margin on semiconductor equipment sales in the latest quarter, indicating potential undervaluation of the stock by approximately 19% based on FCF margins and analysts' revenue estimates [1][3] - The stock is currently trading at $156.31 with a market capitalization of $197.2 billion, showing significant growth over the past three months [1] Financial Performance - Revenue increased by 3% compared to the previous quarter, driven by strong demand for AI-related chip equipment [3] - Gross and operating margins for the quarter were reported at 50.5% and 35.0% respectively, while operating cash flow (OCF) margin was $1.78 billion, reflecting a decrease from $2.55 billion last quarter but a 13.3% increase from $1.57 billion a year ago [4] - Over the past year, the company generated $5.55 billion in FCF, representing 28.3% of revenue, with expectations of maintaining at least 30% FCF margins going forward [5] Revenue Projections - Analysts forecast revenue of $21.26 billion for the year ending June 30, 2026, and $23.53 billion for the following fiscal year, leading to a next-12-month (NTM) revenue estimate of approximately $21.83 billion [6] - Applying a 33% FCF margin to the NTM revenue results in a forecast of $6.55 billion in NTM FCF [6]

Economic Overview - The U.S. inflation rate has reached 3% in September, the highest level since January, with consumer prices rising by 0.3% in that month, up from an annual rate of 2.9% [1][9]. Investment Opportunities - Amid rising inflation, dividend growth stocks present a favorable investment option as their increasing payouts can help maintain purchasing power [2][9]. - Companies with a strong history of dividend growth tend to have robust financial health, providing a defensive hedge against economic uncertainty [4][5]. Selected Dividend Growth Stocks - Five dividend growth stocks identified as solid investment choices include: - **Vertiv (VRT)**: Expected revenue growth of 27.5% for 2025, long-term earnings growth rate of 30%, and an annual dividend yield of 0.08% [10][11]. - **Taiwan Semiconductor (TSM)**: Projected revenue growth of 33.8% for 2025, long-term earnings growth rate of 29.2%, and an annual dividend yield of 0.88% [11]. - **Oracle (ORCL)**: Anticipated revenue growth of 16.5% for fiscal 2026, long-term earnings growth rate of 17.2%, and an annual dividend yield of 0.71% [12]. - **Lam Research (LRCX)**: Expected revenue growth of 11.9% for fiscal 2026, long-term earnings growth rate of 19.6%, and an annual dividend yield of 0.69% [13]. - **Elbit Systems (ESLT)**: Projected revenue growth of 16.4% for 2025, long-term earnings growth rate of 23.3%, and an annual dividend yield of 0.51% [14]. Investment Criteria - Stocks selected for their strong fundamentals include criteria such as: - Positive 5-Year Historical Dividend Growth, Sales Growth, and EPS Growth [6][7]. - Price/Cash Flow ratio less than the industry average, indicating undervaluation [8]. - 52-Week Price Change greater than the S&P 500, ensuring better performance over the past year [8].

Core Insights - Lam Research Corp. (LRCX) has consistently outperformed earnings expectations, marking its 14th consecutive earnings beat with earnings of $1.26 against a consensus of $1.21 [2] - The company is projected to experience double-digit sales growth in Fiscal 2026 and Fiscal 2027, with revenue expected to increase by 11.9% and 11.7% respectively [8] Financial Performance - For the quarter ending September 28, 2025, Lam Research reported a revenue increase of 27.6%, reaching $5.32 billion compared to $4.17 billion a year ago [2] - The gross margin as a percentage of revenue improved to 50.6% from 48% in the previous year [3] Regional Revenue Breakdown - Revenue distribution by region includes China at 43%, Taiwan at 19%, Korea at 15%, Japan at 10%, United States at 6%, Southeast Asia at 5%, and Europe at 2% [3] Analyst Sentiment - Analysts have revised earnings estimates upward for Fiscal 2026 and 2027, with the Zacks Consensus for Fiscal 2026 increasing to $4.68 from $4.53 (13% growth) and for Fiscal 2027 rising to $5.44 from $5.08 (16.1% growth) [4] Stock Performance - Lam Research shares have reached new all-time highs, gaining 18.2% in the last month and up 109.4% year-to-date [5] Valuation Metrics - The company has a forward price-to-earnings (P/E) ratio of 32.4, indicating a premium valuation, as a P/E over 20 is considered expensive [8] - Lam Research also offers a dividend yield of 0.7% [8]

Group 1: Company Analysis - Intel Corporation is highlighted for its ongoing efforts in innovation and market positioning within the semiconductor industry [1] - Trilogy Metals Inc is noted for its strategic focus on mining and exploration in the resource sector, particularly in relation to copper and zinc [1] - VanEck Rare Earth and Strategic Metals ETF is discussed in the context of its investment strategy targeting rare earth elements and strategic metals, which are critical for various technologies [1] - Global X Lithium & Battery Tech ETF is emphasized for its role in the growing lithium market, driven by the demand for electric vehicles and battery technologies [1] Group 2: Market Trends - The analysis covers the increasing demand for semiconductors, driven by technological advancements and consumer electronics [1] - There is a notable trend towards sustainable mining practices and the importance of rare earth elements in the transition to green energy [1] - The lithium market is experiencing significant growth, influenced by the rise of electric vehicles and renewable energy storage solutions [1]

Core Insights - Stanley-Laman Group, Ltd. has established a new position in Lam Research valued at approximately $8.79 million as of September 30, 2025, indicating institutional confidence in the company [1][2][10] Company Overview - Lam Research Corporation is a leading supplier of wafer fabrication equipment and services to the global semiconductor industry, focusing on advanced process solutions for manufacturing complex integrated circuits [5][6] - The company reported a total revenue of $19.59 billion and a net income of $5.81 billion for the trailing twelve months (TTM) [4] Recent Performance - As of October 21, 2025, Lam Research shares were priced at $145.04, reflecting a 99.1% increase over the past year, significantly outperforming the S&P 500 by 86.4 percentage points [3][4] - The company's stock has risen 112% year-to-date, driven by growth in the semiconductor sector, particularly due to the artificial intelligence (AI) revolution [7][10] Investment Implications - The new stake by Stanley-Laman represents 1.3% of the fund's total reportable U.S. equity assets, suggesting a strategic investment in the semiconductor sector [2][3] - Lam Research's recent earnings beat and its critical role in the semiconductor industry make it a compelling investment opportunity for retail investors [11]

Revenue and Income - Revenue for the three months ended September 28, 2025, was $5,324,173, representing a 3% increase compared to $5,171,393 for the three months ended June 29, 2025[77] - Net income for the September 2025 quarter was $1,568,660, down from $1,720,088 in the June 2025 quarter[77] - Systems revenue reached $3,547,565, up from $3,437,625 in the previous quarter, driven by investments in the Foundry market segment[83] - Customer support-related revenue was $1,776,608, slightly increasing from $1,733,768 in the previous quarter[83] Gross Margin and Expenses - Gross margin increased to $2,684,879, or 50.4% of total revenue, compared to $2,589,709, or 50.1%, in the previous quarter[77] - Research and development expenses were $580,178, accounting for 10.8% of revenue, compared to 11.2% in the previous quarter[87] - SG&A expense for the September 2025 quarter was $279,345,000, representing 5.2% of revenue, an increase from $243,128,000 in September 2024[89] - R&D expense in the September 2025 quarter increased due to higher employee-related costs and increased spending on supplies[88] Deferred Revenue and Cash Position - The deferred revenue balance increased to $2.77 billion at the end of September 2025, up from $2.68 billion at the end of June 2025[77] - Cash, cash equivalents, and restricted cash increased to $6.7 billion at the end of September 2025, up from $6.4 billion at the end of June 2025[80] - Total gross cash, cash equivalents, and restricted cash balances were $6.7 billion as of September 28, 2025, an increase from $6.4 billion as of June 29, 2025[102] Cash Flow Activities - Net cash provided by operating activities was $1.78 billion for the three months ended September 28, 2025[103] - Net cash used for investing activities was $186.0 million, primarily for capital expenditures[104] - Net cash used for financing activities was $1.28 billion, mainly due to $975.8 million in treasury stock repurchases and $292.0 million in dividends paid[105] - Changes in operating asset and liability accounts included a decrease in inventory of $189.8 million and an increase in accounts receivable of $255.0 million[103] Tax and Interest - Interest income for the September 2025 quarter was $63,930,000, up from $54,633,000 in June 2025, but down from $68,449,000 in September 2024[90] - Income tax expense for the September 2025 quarter was $58,893,000, with an effective tax rate of 15.6%, up from 3.3% in June 2025[94] Market Segment Focus - Foundry market segment revenue accounted for 60% of total revenue in the September 2025 quarter, up from 52% in the previous quarter[84] - The company continues to focus on R&D investments to support leading-edge semiconductor manufacturing processes[87] - The company expects to maintain sufficient liquidity reserves to support operations and investments through at least the next twelve months[106]

Core Insights - The company offers a Growth Investor Pro service that focuses on teaching investing, trading, and risk management [1] - A successful swing trading alerts system has been in operation for several years [1] - Weekly live webinars are provided, along with access to senior staff and a 24x7 chat environment for participants [1] Subscription Details - A one-month trial is available for $99, allowing potential subscribers to evaluate the service before committing to an annual subscription [2] - The service has received numerous 5-star reviews, indicating positive feedback from users in both bear and bull markets [2]

Core Viewpoint - The article discusses three technology stocks—Micron, Lam Research, and Intel—that are outperforming Nvidia in 2025, highlighting their attractive valuations and potential for growth in the AI sector [3][9]. Company Summaries Micron (MU) - Micron has seen a remarkable year with a 137% increase year-to-date, driven by demand in the AI data center market [10]. - The company has a trailing price-to-earnings (P/E) ratio of 27.2, indicating it still has room for growth as AI demand continues [10][11]. - Analysts suggest that DRAM could be a significant growth area, as high-performance memory is essential for AI and data centers [11]. Lam Research (LRCX) - Lam Research has gained 103% year-to-date, benefiting from the AI wave [12]. - Analysts believe that the full impact of AI on Lam Research's performance is yet to be realized, with expectations of further price target increases [12][13]. - The company is viewed positively due to cyclical and structural tailwinds in the semiconductor equipment sector [13]. Intel (INTC) - Intel has achieved an 89% increase year-to-date, supported by investments from the U.S. government and other firms [14]. - The company plans to launch a new AI data center chip named Crescent Island next year, which could enhance its competitive position in the AI market [15]. - Analysts are optimistic about Intel's prospects, suggesting it could continue to outperform Nvidia in the coming years [15].