Lam Research Corporation: A Mixed Year for Stock Performance
Market Performance Shows Challenges for Chip Manufacturer
Lam Research Corporation (LRCX), located in Fremont, California, focuses on the design, manufacture, and service of semiconductor processing equipment that is vital for producing integrated circuits. With a market capitalization of $93.5 billion, the company’s technology facilitates the deposition and precision etching of films on silicon wafers to create complex circuit designs.
Over the past year, LRCX’s stock has significantly underperformed compared to the broader market. While shares increased by 1.3%, the S&P 500 Index ($SPX) surged nearly 31%. In 2024 alone, LRCX’s stock dropped 7.3%, contrasting sharply with the SPX’s impressive 25.2% gain on a year-to-date basis.
Focusing on a narrower perspective, LRCX has trailed the Invesco Semiconductors ETF (PSI), which has increased by 28.3% over the year. Furthermore, the ETF’s year-to-date growth of 13.9% significantly outpaces LRCX’s losses during the same period.
On October 23, Lam Research reported its first-quarter earnings, leading to a 5.1% uptick in stock price the following trading day. The company outperformed analysts’ expectations for revenue and earnings per share (EPS), providing guidance for the upcoming quarter that also exceeded forecasts.
For the fiscal year ending in June 2025, analysts project a 17.7% increase in LRCX’s EPS, which is expected to reach $3.52 on a diluted basis. Historically, the company has shown a strong pattern, beating the consensus estimate in each of the last four quarters.
Currently, among the 28 analysts covering LRCX stock, the consensus rating stands at “Moderate Buy.” This consensus is formed by 16 “Strong Buy” ratings, two “Moderate Buys,” and ten “Holds.”
The analyst consensus has remained stable over recent months.
On October 24, Stifel Financial Corp. (SF) analyst Brian Chin reaffirmed a “Buy” rating for Lam Research, although he adjusted the price target down from $105 to $100.
The current average price target of $94.23 suggests a potential upside of 29.7% from LRCX’s existing price levels. In contrast, the highest estimated price target of $114 indicates a remarkable upside potential of 56.9%.
On the date of publication, Kritika Sarmah did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article are solely for informational purposes. For more information, please view the Barchart Disclosure Policy here.
The views and opinions expressed herein are those of the author and do not necessarily reflect those of Nasdaq, Inc.
