Lam Research Hits 52-Week High: Is the Stock Still Worth Buying?

Core Viewpoint - Lam Research Corporation (LRCX) has experienced significant stock performance, driven by the AI boom and strong demand for its wafer fabrication equipment, reaching a 52-week high of $173.58 [1][10]. Stock Performance - Year-to-date, Lam Research shares have increased by 138.5%, significantly outperforming the Zacks Electronics – Semiconductors industry growth of 38.2% [2]. - Compared to major semiconductor manufacturing tool providers, LRCX has outperformed KLA Corporation (KLAC), Applied Materials, Inc. (AMAT), and ASML Holding (ASML), which saw stock increases of 97.7%, 57.6%, and 52.3%, respectively [2]. Demand Drivers - The company is benefiting from the rising demand for AI and data center chips, which require advanced fabrication technologies [6]. - In 2024, shipments for gate-all-around nodes and advanced packaging exceeded $1 billion, with expectations to triple to over $3 billion by 2025 [7]. Financial Performance - Lam Research reported a 28% revenue growth year-over-year, reaching $5.32 billion, surpassing the Zacks Consensus Estimate by 2% [11]. - Non-GAAP earnings for the first quarter were $1.26 per share, exceeding consensus estimates by 4.1%, with a year-over-year increase of 46.5% [12]. - The operating margin improved to 35%, up 410 basis points from the previous year, aided by cost controls and expansion in Asia [12]. Future Growth Expectations - Analysts project continued growth, with Zacks Consensus Estimates indicating a year-over-year revenue increase of 14.1% for fiscal 2026 and 12.3% for fiscal 2027 [14]. - Earnings per share are expected to grow by 15.7% and 16.5% for fiscal 2026 and 2027, respectively [14]. Valuation - Despite the strong year-to-date performance, LRCX trades at a forward price-to-earnings (P/E) multiple of 33.34, slightly below the industry average of 33.80 [15]. - Compared to major semiconductor equipment providers, LRCX has a lower P/E multiple than ASML but is at a premium to KLAC and AMAT [18]. Investment Recommendation - Lam Research's solid financial performance, focus on AI-driven growth, and reasonable valuation make it a compelling investment option [19].