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

Lam Research Corporation LRCX has had a remarkable run so far this year, with its shares hitting a new 52-week high of $173.58 last Friday. The stock has been a key beneficiary of the artificial intelligence (AI) boom, which has driven strong demand for its wafer fabrication equipment, which is used in building advanced chips for AI applications.Year to date, Lam Research shares have soared 138.5%, outperforming the Zacks Electronics – Semiconductors industry’s growth of 38.2%. It has even outpaced major semiconductor manufacturing tool providers, including KLA Corporation KLAC, Applied Materials, Inc. AMAT and ASML Holding ASML. Shares of KLA Corporation, Applied Materials and ASML Holding have risen 97.7%, 57.6% and 52.3%, respectively.LRCX YTD Price Return PerformanceImage Source: Zacks Investment ResearchThis outperformance shows investors are becoming increasingly confident in Lam Research’s long-term prospects, even in a volatile market shaped by trade conflicts and geopolitical risks. We believe that LRCX stock will sustain this upward trajectory at least in the near term, making it worth buying for now.AI and Data Center Chip Demand Aids LRCX’s MomentumLam Research is benefiting from the booming demand for AI and datacenter chips, which require advanced fabrication technologies. The company’s deposition and etch solutions are critical for producing high-bandwidth memory (HBM) and advanced packaging technologies, which are essential for AI workloads.In 2024, Lam Research’s shipments for gate-all-around nodes and advanced packaging exceeded $1 billion, and management expects this figure to triple to more than $3 billion by 2025. Additionally, the industry’s migration to backside power distribution and dry-resist processing presents growth opportunities for LRCX’s cutting-edge fabrication solutions.With AI-driven investments accelerating, Lam Research’s leading position in etch and deposition makes it a key beneficiary of the ongoing semiconductor spending cycle.LRCX’s Strong Financial PerformanceDespite ongoing macroeconomic challenges, geopolitical issues, and trade and tariff wars, Lam Research’s financials remain impressive. In the company’s last reported financial results for the first quarter of fiscal 2026, total revenues increased 28% year over year to $5.32 billion, surpassing the Zacks Consensus Estimate by 2%. The robust year-over-year growth was primarily driven by continued demand across the Systems and Customer Support Business Group segments.Lam Research reported first-quarter non-GAAP earnings of $1.26 per share, which beat the consensus mark by 4.1%. The bottom line also increased 46.5% on a year-over-year basis.Lam Research Corporation Price, Consensus and EPS Surprise Lam Research Corporation price-consensus-eps-surprise-chart | Lam Research Corporation QuoteExpanding its manufacturing operations in Asia has also helped the company lower costs and improve margins. In the first quarter, Lam Research’s non-GAAP operating margin rose to 35%, up 410 basis points from the year-ago quarter, which is impressive, considering the challenging macroeconomic environment.This strong financial performance reinforces Lam Research’s resilience in navigating an evolving semiconductor cycle. As demand grows for advanced nodes, LRCX’s specialized technology in etch and deposition tools for high-aspect-ratio structures positions it well to capitalize on this trend. The company’s first-quarter results also highlight its effective cost management, which has enabled sustained profitability even amid fluctuating end-market demand.Analysts’ expectations for the top and bottom lines indicate continued growth momentum for Lam Research in the years ahead. The Zacks Consensus Estimate for fiscal 2026 and 2027 revenues implies a year-over-year increase of 14.1% and 12.3%, respectively. The consensus mark for fiscal 2026 and 2027 earnings per share indicates growth of 15.7% and 16.5%, respectively.Valuation: LRCX Still Reasonably PricedEven after the robust YTD rally, Lam Research stock doesn’t look expensive. LRCX currently trades at a forward price-to-earnings (P/E) multiple of 33.34, which is slightly lower than the industry’s 33.80. The company’s discounted valuation multiple aligns with its long-term growth potential.Lam Research Forward 12-Month P/E RatioImage Source: Zacks Investment ResearchCompared with major semiconductor equipment providers, LRCX trades at a lower P/E multiple than ASML, while at a premium to KLAC and AMAT. At present, ASML Holding, KLA Corporation and Applied Materials have forward 12-month P/E multiples of 35.10, 32.46 and 26.18, respectively.Final Thoughts: Buy LRCX Stock Right NowLam Research’s solid financial performance, strategic focus on AI-driven growth and reasonable valuation make it a compelling investment option right now. The company’s expanding market share in AI and datacenter fabrication, coupled with innovative product launches, strengthens its competitive positioning.LRCX carries a Zacks Rank #2 (Buy) at present. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.5 Stocks Set to DoubleEach was handpicked by a Zacks expert as the favorite stock to gain +100% or more in the months ahead. They includeStock #1: A Disruptive Force with Notable Growth and ResilienceStock #2: Bullish Signs Signaling to Buy the DipStock #3: One of the Most Compelling Investments in the MarketStock #4: Leader In a Red-Hot Industry Poised for GrowthStock #5: Modern Omni-Channel Platform Coiled to SpringMost of the stocks in this report are flying under Wall Street radar, which provides a great opportunity to get in on the ground floor. While not all picks can be winners, previous recommendations have soared +171%, +209% and +232%.Download Atomic Opportunity: Nuclear Energy's Comeback free today.Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report KLA Corporation (KLAC): Free Stock Analysis Report ASML Holding N.V. (ASML): Free Stock Analysis Report Lam Research Corporation (LRCX): Free Stock Analysis Report Applied Materials, Inc. (AMAT): Free Stock Analysis ReportThis article originally published on Zacks Investment Research (zacks.com).Zacks Investment ResearchWeiter zum vollständigen Artikel bei Zacks Weiter zum vollständigen Artikel bei Zacks