Why Lam Research (LRCX) Stock Is Trading Up Today
What Happened?
Shares of semiconductor equipment maker Lam Research (NASDAQ:LRCX) jumped 6.3% in the morning session after the company reported third-quarter earnings results that beat analysts' revenue and EPS expectations. Next quarter's guidance for revenue and EPS were also both ahead. Overall, we think this was a solid quarter. After the initial pop the shares cooled down to $75.21, up 3% from previous close.
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What The Market Is Telling Us
Lam Research’s shares are quite volatile and have had 17 moves greater than 5% over the last year. In that context, today’s move indicates the market considers this news meaningful but not something that would fundamentally change its perception of the business.
The previous big move we wrote about was 28 days ago when the stock gained 7.5% as semiconductor stocks, especially the memory chip manufacturers, surged after Micron reported impressive fourth-quarter earnings results. Micron beat across most of the key metrics we track, including revenue, operating profit, and EPS. Notably, the company recorded a whopping 93% revenue growth compared to the previous year, showing that the AI party is still ongoing. Micron attributed the outperformance to the growing demand for memory chips that power generative AI applications.
Looking ahead, Micron provided strong sales and profitability guidance for the next quarter, which exceeded Wall Street's expectations. Overall, the result highlights the abundant growth opportunities for chip makers with technologies to accelerate the booming AI trend.
Lam Research is up 0.3% since the beginning of the year, but at $75.21 per share, it is still trading 33.3% below its 52-week high of $112.73 from July 2024. Investors who bought $1,000 worth of Lam Research’s shares 5 years ago would now be looking at an investment worth $2,832.
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