CANADA - 2025/02/10: In this photo illustration, the Lam Research Corporation logo is seen displayed ... More on a smartphone screen. (Photo Illustration by Thomas Fuller/SOPA Images/LightRocket via Getty Images)SOPA Images/LightRocket via Getty Images Lam Research (NASDAQ:LRCX) stock has experienced a notable increase this year, rising by 22% and significantly outperforming the S&P 500’s modest gain of 2%. This remarkable performance can be attributed primarily to the company’s solid quarterly results, fue ...

Company Performance - Lam Research (LRCX) has returned approximately 22.3% year-to-date, significantly outperforming the average gain of 1.8% in the Computer and Technology sector [4] - The Zacks Consensus Estimate for LRCX's full-year earnings has increased by 7.4% over the past quarter, indicating improved analyst sentiment and a more positive earnings outlook [4] - Lam Research is currently ranked 2 (Buy) in the Zacks Rank system, which emphasizes earnings estimates and revisions [3] Industry Context - Lam Research is part of the Electronics - Semiconductors industry, which consists of 45 individual stocks and currently holds a Zacks Industry Rank of 82 [6] - The average gain for stocks in the Electronics - Semiconductors industry this year is 3%, highlighting that LRCX is performing better than its peers in this specific industry [6] - Another notable stock in the Computer and Technology sector is Couchbase, Inc. (BASE), which has returned 27.4% year-to-date and also holds a Zacks Rank of 2 (Buy) [5]

Core Insights - Consistent earnings growth is valued for profitability, but earnings acceleration has a more significant impact on stock prices, often preceding stock value increases [1][3] - Orla Mining Ltd. (ORLA), SentinelOne, Inc. (S), and Lam Research Corporation (LRCX) are currently demonstrating strong earnings acceleration [1][8] Earnings Acceleration Definition - Earnings acceleration refers to the incremental growth in a company's earnings per share (EPS), specifically when the quarter-over-quarter growth rate increases over time [2] Importance of Earnings Acceleration - Unlike earnings growth, which may already be reflected in stock prices, earnings acceleration can identify stocks that have not yet attracted investor attention, leading to potential price rallies [3] Earnings Growth Trends - An increasing percentage of earnings growth indicates a fundamentally sound company, while stagnant or declining growth percentages may signal consolidation or downturns [4] Screening Parameters - Stocks are screened based on the last two quarter-over-quarter EPS growth rates exceeding previous periods, with projected growth rates for the upcoming quarter expected to surpass prior periods [5][6][7] Top Stocks Identified - The screening process narrowed down to four stocks, with ORLA, SentinelOne, and LRCX showing strong earnings acceleration. ORLA projects 184% EPS growth, SentinelOne 280%, and LRCX 33.8% for the current year [8][9][10][11]

Core Insights - Micron Technology and Lam Research are both significant players in the semiconductor industry, focusing on different segments: Micron on memory chips and Lam on manufacturing equipment [1][2] - Both companies are benefiting from the rise of AI, but their business models and long-term outlooks differ [2] Micron Technology - Micron is experiencing strong demand for high-bandwidth memory (HBM) and DRAM products, with revenues and non-GAAP EPS increasing by 38% and 271% year over year in Q2 fiscal 2025 [3] - The company has introduced AI-optimized memory solutions, with its HBM3E products noted for their power efficiency and bandwidth [4] - Micron plans to open a new HBM advanced packaging facility in Singapore by 2026, aligning with its AI-driven growth strategy [5] - Despite strong sales, Micron faces margin pressures, with non-GAAP gross margin declining to 37.9% from 39.5% in the previous quarter due to weaker NAND pricing and startup costs [6] - The company anticipates further margin compression, guiding for a gross margin of 36.5% in Q3 [7] Lam Research - Lam Research is capitalizing on AI trends by providing essential tools for semiconductor manufacturing, including those for HBM and advanced packaging [8] - The company reported shipments exceeding $1 billion for gate-all-around nodes and advanced packaging in 2024, with expectations to triple this figure in 2025 [10] - Lam Research's non-GAAP gross margin improved by 150 basis points to 49% in Q3 fiscal 2025, with guidance indicating further expansion [12] - The non-GAAP operating margin also improved by 210 basis points to 32.8%, reflecting effective supply-chain management [13] Comparative Performance - Year-to-date, Micron's shares have risen by 25.1%, while Lam Research's shares have increased by 17.4% [14] - Micron trades at a forward sales multiple of 2.72X, significantly lower than Lam Research's 5.88X, reflecting differing profitability and margin stability [15][16] - Lam Research's gross margins exceed Micron's by more than 10 percentage points, indicating less exposure to volatile memory pricing [19] Conclusion - While both companies are leveraging AI-driven growth, Lam Research is positioned as the better investment due to expanding margins and consistent performance amid pricing pressures faced by Micron [20][21]

Investors in Lam Research Corporation (LRCX) need to pay close attention to the stock based on moves in the options market lately. That is because the June 20, 2025 $160.00 Put had some of the highest implied volatility of all equity options today.What is Implied Volatility?Implied volatility shows how much movement the market is expecting in the future. Options with high levels of implied volatility suggest that investors in the underlying stocks are expecting a big move in one direction or the other. It c ...

Company Performance - Lam Research (LRCX) closed at $84.87, reflecting a +0.12% change from the previous trading day's closing, outperforming the S&P 500 which lost 0.53% [1] - Over the past month, shares of Lam Research gained 12.94%, surpassing the Computer and Technology sector's gain of 8.67% and the S&P 500's gain of 5.17% [2] Financial Expectations - Analysts expect Lam Research to report earnings of $1.20 per share, indicating a year-over-year growth of 48.15%, with revenue anticipated at $4.98 billion, representing a 28.52% increase from the same quarter last year [3] - For the annual period, earnings are projected at $4 per share and revenue at $18.21 billion, signifying increases of +33.78% and +22.15% respectively from the previous year [4] Analyst Sentiment - Recent revisions to analyst forecasts for Lam Research are crucial as they reflect short-term business trends, with positive revisions indicating analyst optimism about the company's profitability [4] - The Zacks Rank system, which considers estimate changes, currently rates Lam Research at 2 (Buy), suggesting a favorable outlook [6] Valuation Metrics - Lam Research has a Forward P/E ratio of 21.17, which is lower than the industry average of 25.08, indicating it may be trading at a discount [7] - The company has a PEG ratio of 1.19, compared to the industry average of 1.65, suggesting a favorable valuation relative to expected earnings growth [8] Industry Context - The Electronics - Semiconductors industry, part of the Computer and Technology sector, holds a Zacks Industry Rank of 81, placing it in the top 33% of over 250 industries [9]

Lam Research Corporation (NASDAQ:LRCX) Bank of America Global Technology Conference June 3, 2025 ET Company Participants Doug Bettinger - CFO Conference Call Participants Vivek Arya - Bank of America Vivek Arya Welcome, everyone to this session, Vivek Arya from BofA semiconductor team and really delighted in order to have the team from Lam Research join us this morning; and Doug Bettinger, the CFO of Lam Research. And we will start with a quick safe harbor statement from Doug, and then we'll get into the Q& ...

Summary of Lam Research (LRCX) 2025 Conference Call Company Overview - **Company**: Lam Research Corporation (LRCX) - **Date of Conference**: June 03, 2025 Industry Insights - **Industry**: Semiconductor Equipment - **Market Size**: Wafer fab equipment spending is projected to be approximately $100 billion in 2025, reflecting mid-single-digit growth from the previous year [7] - **Key Segments**: - **Foundry**: Strong demand, particularly in leading-edge foundry [7] - **DRAM**: Growth driven by DDR5 and high bandwidth memory (HBM) [7] - **NAND**: Undergoing upgrades, with a projected $40 billion addressable opportunity over the next several years [28][29] Core Points and Arguments - **Gross Margins**: - Current gross margin is guided at 49.5%, up from 46% in the previous comparable quarter [17][18] - The company has adopted a "close to customer" strategy, enhancing margins by aligning production closer to Asia-based customers [18][19] - **NAND Market Dynamics**: - NAND upgrades are expected to be a significant growth driver, with two-thirds of the installed base below 200 layers, necessitating upgrades for QLC (Quad-Level Cell) production [32][33] - The company anticipates broad industry adoption of NAND upgrades this year, not limited to a single customer [30] - **Long-term Growth**: - The evolution of 3D device architectures is expected to increase the addressable market for Lam Research, with a shift in etch and deposition share from low 30% to high 30% [14][15] - The company is positioned to capture at least half of the growth in the etch and deposition market due to a strong product portfolio [15] - **China Market Impact**: - Revenue from China is expected to decline from approximately 40% to 30% of total revenue due to geopolitical factors [23][24] - The company does not foresee significant incremental impacts from recent U.S. Department of Commerce restrictions on China [22] - **Free Cash Flow Generation**: - Lam Research has demonstrated strong free cash flow generation, even during downturns, with a commitment to return at least 85% of free cash flow to shareholders [86][88] Additional Important Insights - **Customer Support Business Group (CSBG)**: - The upgrade segment within CSBG is expected to show significant strength this year, although overall growth may be flat due to reduced spending in China [45] - **Competitive Landscape**: - Lam Research maintains a strong market position in etch and deposition despite competition from domestic Chinese vendors [66][70] - The company is investing approximately $2 billion in R&D to stay ahead technologically [71] - **Future Outlook**: - The company anticipates that the current geopolitical concerns regarding China will diminish over the next five years as the market stabilizes [84] - **Dividend and Buyback Strategy**: - Lam Research plans to grow dividends annually and maintain a competitive position in the industry regarding shareholder returns [88][89]

Core Viewpoint - Lam Research (LRCX) shows potential as a stock pick due to its recent technical performance and positive earnings estimate revisions [1][4]. Technical Analysis - LRCX has surpassed resistance at the 20-day moving average, indicating a short-term bullish trend [1]. - The 20-day simple moving average is a key trading tool that helps smooth out price fluctuations and provides trend reversal signals [2]. Performance Metrics - Over the past four weeks, LRCX has gained 11.6% [4]. - The company holds a Zacks Rank 2 (Buy), suggesting further upward movement potential [4]. Earnings Estimates - There have been 12 upward revisions for LRCX's earnings estimates for the current fiscal year, with no downward revisions [4]. - The consensus earnings estimate has also increased, reinforcing the bullish outlook for the stock [5].

Summary of China Semiconductors Conference Call Industry Overview - The focus is on the China Wafer Fab Equipment (WFE) market, with a revision of the 2025 outlook due to stronger foundry demand [1][17][26]. - The WFE demand in China is projected to reach USD 39 billion in 2025, a 2% increase from previous estimates, despite a year-over-year decline of 13% [1][26]. - For 2026, the WFE demand is expected to be USD 41 billion, reflecting a 5% year-over-year growth [1][26]. Key Insights - **Demand Dynamics**: The demand for WFE in China remains robust, with a 36% growth in 2023, contrasting with a 14% decline in the rest of the world [17][18]. The share of China in global WFE demand is expected to stabilize around 30% by 2026 [18][20]. - **Local Production**: The local AI chip production in China is gaining momentum, driven by export controls limiting access to advanced overseas manufacturing [2]. This has led to accelerated investments in advanced logic at local foundries [2]. - **Capacity Expansion**: Despite global overcapacity concerns, Chinese foundries are expected to continue expanding capacity, aiming for self-sufficiency in mature logic manufacturing [3][34]. Current utilization rates are high, with some foundries operating at over 100% [3]. - **Import Trends**: Year-to-date WFE imports have shown resilience, with only a 2% decline year-over-year, indicating a better-than-expected ramp-up of advanced logic customers [4][41]. The largest import region is Guangdong, suggesting strong local demand [4]. Company Ratings and Projections - **NAURA, AMEC, and Piotech** are rated as outperformers, benefiting from domestic WFE substitution [5][8][9][10]. - **AMEC**: Focused on Dry Etch and expanding in Deposition, expected to gain market share [8]. - **NAURA**: As a leader in WFE, it has a diverse product portfolio and client base, poised for growth [9]. - **Piotech**: Known for innovation in Deposition technologies, expected to benefit from domestic market trends [10]. - **Global Vendors**: Companies like AMAT and LRCX are also rated as outperformers, with expectations of growth driven by market dynamics [11]. Investment Implications - The ongoing push for self-sufficiency in China is expected to double the domestic share of WFE to 28% by 2026 [22][27]. - Government subsidies are incentivizing higher localization ratios in equipment procurement [22]. - The overall WFE market is projected to see a decline in global vendor sales, but local vendors are expected to maintain strong growth, offsetting some of the declines [34]. Additional Considerations - The guidance from global vendors indicates a normalization of their China revenue mix, with expectations of a decrease in their market share from 38% in 2024 to 27% in 2025 [30]. - The competitive landscape remains dynamic, with local suppliers increasingly collaborating with domestic fabs to enhance supply chain resilience [27][28]. This summary encapsulates the key points from the conference call regarding the China semiconductor industry, focusing on WFE demand, local production dynamics, company ratings, and investment implications.