Home Most Popular Investing The Rise of Lam Research (LRCX) and the Innovations Fueling its Growth

The Rise of Lam Research (LRCX) and the Innovations Fueling its Growth

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The Rise of Lam Research (LRCX) and the Innovations Fueling its Growth

Lam Research has recently upped its game by introducing a groundbreaking pulsed laser deposition (PLD) system known as Pulsus.

This new PLD tool promises films with a scintillating 40% scandium content, paving the way for state-of-the-art MEMS-based microphones and RF filters that boast unparalleled sensitivity and performance levels.

What’s more, the innovative PLD system offers significant advantages by swapping out lead zirconate titanate with lead-free AlScN, providing chipmakers with superior film quality and uniformity at a lower cost per wafer compared to traditional methods. This advancement is set to boost manufacturing yields and expedite product development for AR/VR and quantum computing sectors.

Lam Research expects to witness a surge in demand across consumer electronics and automotive applications following the launch of Pulsus.

Furthermore, this move positions the company strategically to leverage the growth opportunities abound in the global PLD systems market. According to RationalStat, the global PLD systems market is poised to register a robust CAGR of 7.8% between 2023 and 2030.

Steering Through Innovation and Expansion

The recent unveiling of the PLD system is a testament to Lam Research’s relentless commitment to fortify its product portfolio, a pivotal driver for its growth trajectory. Year-to-date, the company’s shares have surged by an impressive 22.6%, overshadowing the 11.5% growth recorded by the Computer & Technology sector of Zacks.

A notable addition to its arsenal is the Semiverse Solutions portfolio, a collection of software platforms designed for process modeling, design automation, and simulations. This comprehensive suite generates a virtual nanofabrication environment aimed at accelerating breakthroughs in the industry while reducing costs.

Moreover, Lam Research is reaping the benefits of the Coronus DX solution, a pioneering bevel deposition solution catering to the needs of next-gen logic, 3D NAND, and advanced packaging applications. This cutting-edge solution shields wafer edges by depositing a protective film, thereby curbing defects, enhancing yield, and empowering chipmakers to implement advanced processes for next-gen chips.

The Road Ahead

Building upon these efforts to bolster its product suite, Lam Research is well-positioned to enhance its financial performance in the forthcoming period.

However, the company remains wary of the systems business’s frailty, largely attributable to lackluster memory spending trends.

Estimates indicate a 15.5% year-over-year decline in total revenues for fiscal 2024, pegged at $14.72 billion. Similarly, earnings are expected to plummet to $28.88 per share, marking a commensurate 15.5% drop from the prior-year quarter.

Market Insight and Future Prospects

Lam Research currently holds a Zacks Rank #2 (Buy), reflecting investor confidence in the stock.

Other tech companies worth considering in the sector include Airbnb ABNB, Badger Meter BMI, and AMETEK AME, each securing a Zacks Rank #2 at present.

Airbnb has witnessed a 22.2% surge in its year-to-date stock performance, with a promising 16.85% long-term earnings growth rate forecasted.

Badger Meter and AMETEK have both seen gains of 4.3% and 11.4% respectively in the year-to-date period. The long-term earnings growth rates for BMI and AME are projected at 12.27% and 9.19%, respectively.

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Opinions shared in this article are reflective of the author’s views and not necessarily those of Nasdaq, Inc.