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Lam Research (LRCX) Surges 5.3%: Is This an Indication of Further Gains?

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Lam Research (LRCX - Free Report) shares ended the last trading session 5.3% higher at $62.20. The jump came on an impressive volume with a higher-than-average number of shares changing hands in the session. This compares to the stock's 25.2% loss over the past four weeks.

The upswing was likely due to a positive update from the Bank of America and the perception that semiconductor companies with strong fundamentals and pricing power will perform well in the current market climate, potentially benefiting from exemptions from tariffs on semiconductors.

This semiconductor equipment maker is expected to post quarterly earnings of $1 per share in its upcoming report, which represents a year-over-year change of +28.2%. Revenues are expected to be $4.64 billion, up 22.3% from the year-ago quarter.

Earnings and revenue growth expectations certainly give a good sense of the potential strength in a stock, but empirical research shows that trends in earnings estimate revisions are strongly correlated with near-term stock price movements.

For Lam Research, the consensus EPS estimate for the quarter has been revised marginally higher over the last 30 days to the current level. And a positive trend in earnings estimate revision usually translates into price appreciation. So, make sure to keep an eye on LRCX going forward to see if this recent jump can turn into more strength down the road.

The stock currently carries a Zacks Rank #3 (Hold). You can see the complete list of today's Zacks Rank #1 (Strong Buy) stocks here >>>>

Lam Research is a member of the Zacks Electronics - Semiconductors industry. One other stock in the same industry, Applied Materials (AMAT - Free Report) , finished the last trading session 4.7% higher at $132.85. AMAT has returned -18.5% over the past month.

Applied Materials' consensus EPS estimate for the upcoming report has remained unchanged over the past month at $2.30. Compared to the company's year-ago EPS, this represents a change of +10.1%. Applied Materials currently boasts a Zacks Rank of #3 (Hold).


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