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LRCX Soars 59% in Three Months: Is the Stock Still Worth Buying?
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Key Takeaways
LRCX surged 58.6% in three months, outpacing peers and the broader semiconductor industry.
Lam Research shipped $1B in AI chip tools in 2024, with volume expected to triple in 2025.
The operating margin rose to 32.8% in Q3 FY25 as Asia expansion cut costs and boosted efficiency.
Lam Research Corporation (LRCX - Free Report) has surged 58.6% in the past three months, comfortably outperforming the broader Zacks Electronics – Semiconductors industry, which rose 54.7%. While many semiconductor names have rallied, LRCX’s gains stand out, even among top peers, including Marvell Technology (MRVL - Free Report) , Applied Materials (AMAT - Free Report) and QUALCOMM (QCOM - Free Report) . Shares of Marvell Technology, Applied Materials and QUALCOMM have soared 47.5%, 37.7% and 11.6%, respectively.
3-Month Price Return Performance
Image Source: Zacks Investment Research
This sharp outperformance signals that investors are placing high confidence in Lam Research’s growth outlook despite broader concerns like geopolitical tensions and global trade issues. In our view, this optimism is backed by solid fundamentals, and LRCX still looks attractive, even after the recent rally.
AI and Chip Trends Power LRCX’s Momentum
Lam Research is benefiting from powerful shifts in semiconductor demand, particularly around artificial intelligence (AI) and data center chips. These advanced chips require complex manufacturing, and Lam provides the essential tools, like deposition and etching systems, needed to build them.
In 2024 alone, Lam Research shipped more than $1 billion worth of products tied to next-gen chip technologies and packaging. The figure is expected to triple in 2025. LRCX’s equipment is especially critical as the industry moves toward innovations like backside power delivery and dry-resist processing.
Lam Research’s steady investments in research & development and new products are paying off. Its Cryo 3.0 technology has set new standards in the industry, and the Aether dry-resist system is being adopted, especially for high-bandwidth DRAM.
Expanding its manufacturing operations in Asia has also helped the company lower costs and improve margins. In the third quarter of fiscal 2025, Lam Research’s non-GAAP operating margin rose to 32.8%, up 210 basis points from last year, which is impressive, considering the tough conditions in the semiconductor market.
LRCX’s Quarterly Numbers Confirm Strength
Lam Research’s third-quarter fiscal 2025 confirms its ability to execute well, even in uncertain times. Revenues rose 24.5% year over year to $4.72 billion, while non-GAAP EPS (adjusted for the stock split) jumped 33.5%. Strong demand from memory and logic customers, along with tight cost control, helped the company beat expectations on both the top and bottom lines.
Lam Research’s consistent performance reinforces investor trust in its long-term business model and earnings stability. The stock has an impressive history of beating earnings estimates. LRCX surpassed the Zacks Consensus Estimate for earnings in each of the trailing four quarters, the average surprise being 6.1%.
Lam Research Corporation Price, Consensus and EPS Surprise
Even after the robust rally, Lam Research stock doesn’t look expensive. LRCX currently trades at a forward price-to-earnings (P/E) multiple of 25, which is significantly lower than the industry’s 33.81. The company’s discounted valuation multiple aligns with its long-term growth potential.
Image Source: Zacks Investment Research
However, the stock is trading at a premium to major industry players, including QUALCOMM, Applied Materials and Marvell Technology. At present, QUALCOMM, Applied Materials and Marvell Technology have forward 12-month P/E multiples of 13.14, 19.13 and 23.66, respectively.
Conclusion: LRCX Still Looks Like a Buy
Lam Research’s reasonable valuation, strong financials and clear focus on AI-related growth make it a good investment choice right now. Its market position in AI and data center chipmaking, combined with ongoing innovation, should keep driving long-term gains.
Image: Bigstock
LRCX Soars 59% in Three Months: Is the Stock Still Worth Buying?
Key Takeaways
Lam Research Corporation (LRCX - Free Report) has surged 58.6% in the past three months, comfortably outperforming the broader Zacks Electronics – Semiconductors industry, which rose 54.7%. While many semiconductor names have rallied, LRCX’s gains stand out, even among top peers, including Marvell Technology (MRVL - Free Report) , Applied Materials (AMAT - Free Report) and QUALCOMM (QCOM - Free Report) . Shares of Marvell Technology, Applied Materials and QUALCOMM have soared 47.5%, 37.7% and 11.6%, respectively.
3-Month Price Return Performance
Image Source: Zacks Investment Research
This sharp outperformance signals that investors are placing high confidence in Lam Research’s growth outlook despite broader concerns like geopolitical tensions and global trade issues. In our view, this optimism is backed by solid fundamentals, and LRCX still looks attractive, even after the recent rally.
AI and Chip Trends Power LRCX’s Momentum
Lam Research is benefiting from powerful shifts in semiconductor demand, particularly around artificial intelligence (AI) and data center chips. These advanced chips require complex manufacturing, and Lam provides the essential tools, like deposition and etching systems, needed to build them.
In 2024 alone, Lam Research shipped more than $1 billion worth of products tied to next-gen chip technologies and packaging. The figure is expected to triple in 2025. LRCX’s equipment is especially critical as the industry moves toward innovations like backside power delivery and dry-resist processing.
Lam Research’s steady investments in research & development and new products are paying off. Its Cryo 3.0 technology has set new standards in the industry, and the Aether dry-resist system is being adopted, especially for high-bandwidth DRAM.
Expanding its manufacturing operations in Asia has also helped the company lower costs and improve margins. In the third quarter of fiscal 2025, Lam Research’s non-GAAP operating margin rose to 32.8%, up 210 basis points from last year, which is impressive, considering the tough conditions in the semiconductor market.
LRCX’s Quarterly Numbers Confirm Strength
Lam Research’s third-quarter fiscal 2025 confirms its ability to execute well, even in uncertain times. Revenues rose 24.5% year over year to $4.72 billion, while non-GAAP EPS (adjusted for the stock split) jumped 33.5%. Strong demand from memory and logic customers, along with tight cost control, helped the company beat expectations on both the top and bottom lines.
Lam Research’s consistent performance reinforces investor trust in its long-term business model and earnings stability. The stock has an impressive history of beating earnings estimates. LRCX surpassed the Zacks Consensus Estimate for earnings in each of the trailing four quarters, the average surprise being 6.1%.
Lam Research Corporation Price, Consensus and EPS Surprise
Lam Research Corporation price-consensus-eps-surprise-chart | Lam Research Corporation Quote
LRCX’s Valuation Still Looks Attractive
Even after the robust rally, Lam Research stock doesn’t look expensive. LRCX currently trades at a forward price-to-earnings (P/E) multiple of 25, which is significantly lower than the industry’s 33.81. The company’s discounted valuation multiple aligns with its long-term growth potential.
Image Source: Zacks Investment Research
However, the stock is trading at a premium to major industry players, including QUALCOMM, Applied Materials and Marvell Technology. At present, QUALCOMM, Applied Materials and Marvell Technology have forward 12-month P/E multiples of 13.14, 19.13 and 23.66, respectively.
Conclusion: LRCX Still Looks Like a Buy
Lam Research’s reasonable valuation, strong financials and clear focus on AI-related growth make it a good investment choice right now. Its market position in AI and data center chipmaking, combined with ongoing innovation, should keep driving long-term gains.
Lam Research carries a Zacks Rank #2 (Buy) at present. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.