Lam Research Soars 109% YTD: Is LRCX Stock Still Worth Buying?

Core Insights - Lam Research Corporation (LRCX) has experienced a significant stock price increase of 109% year-to-date, outperforming the Zacks Electronics – Semiconductors industry's gain of 33.5% [1][5] - The company has surpassed major semiconductor manufacturing tool providers such as KLA Corporation, ASML Holding, and Applied Materials, which saw stock increases of 80.4%, 42.5%, and 42% respectively [2] Financial Performance - In the first quarter of fiscal 2026, LRCX reported total revenues of $5.32 billion, a 28% year-over-year increase, exceeding the Zacks Consensus Estimate by 2% [6] - Non-GAAP earnings per share for the same quarter were $1.26, beating consensus estimates by 4.1%, and reflecting a 46.5% increase year-over-year [7] - The company's non-GAAP operating margin improved to 35%, up 410 basis points from the previous year, showcasing effective cost management [7][9] Market Trends and Growth Drivers - LRCX is benefiting from the rising demand for AI and datacenter chips, which require advanced fabrication technologies [10] - Shipments for gate-all-around nodes and advanced packaging are projected to exceed $1 billion in 2024, with expectations to triple to over $3 billion by 2025 [11] - Analysts forecast continued growth, with revenue estimates for fiscal 2026 and 2027 indicating year-over-year increases of 14.1% and 12.1%, respectively [13] Valuation - Despite the strong stock performance, LRCX is trading at a forward price-to-earnings (P/E) multiple of 29.52, lower than the industry average of 34.89, suggesting a reasonable valuation [14][17] - Compared to major semiconductor stocks, LRCX has a lower P/E multiple than ASML and KLA Corporation, while trading at a premium to Applied Materials [17] Investment Recommendation - Given its solid financial performance, focus on AI-driven growth, and attractive valuation, LRCX is considered a compelling investment option [18][19]