10 Best Semiconductor Equipment Stocks to Buy Now

4. Lam Research Corporation (NASDAQ:LRCX)

Number of Hedge Fund Holders In Q3 2024: 58

Lam Research Corporation (NASDAQ:LRCX) is an American semiconductor manufacturing equipment provider whose products are used in several phases of the chip manufacturing process such as etching and deposition. Yet, despite this, the shares are up by a modest 1.8% year-to-date. While industry sluggishness has had a role to play in the drop, Lam Research Corporation (NASDAQ:LRCX) has also struggled due to semiconductor tensions between the US and China. The shares fell by a sizable 14.8% in mid-July after reports of fresh American sanctions against China and then dipped by another 17% after the firm’s second-quarter earnings saw 39% of revenue being derived from China. However, Lam Research Corporation (NASDAQ:LRCX) has also benefited from AI catalysts that led it to beat second-quarter revenue estimates, and the broader chip recovery coupled with China tensions should drive the hypothesis moving forward.

Columbia Threadneedle Investments mentioned Lam Research Corporation (NASDAQ:LRCX) in its Q3 2024 investor letter. Here is what the fund said:

“Lam Research Corporation (NASDAQ:LRCX) was a disappointing position for the fund during the quarter despite strong long-term returns. The stock experienced volatility in July on the back of a rotation out of large-cap technology into small-cap stocks and some general investor fears about the ROI potential from the AI spend. Escalating tensions between the United States and China have impacted Lam’s returns, as U.S. restrictions on high-tech exports to China, particularly advanced AI chips, have been a major negative for chip providers. The fund had an overweight position to Bloom Energy during the quarter and the stock moved lower, which detracted from performance relative to the fund’s benchmark. We continue to believe that Bloom has the best technology in the world to solve the electricity shortage that overhangs new AI data center builds in the U.S. and around the world. Bloom’s fuel cells plug into natural gas lines and can fit on a data center’s campus without taking up too much real estate. Other solutions to the “time to power” issue inherently take too long to provision, namely, nuclear, wind and solar power as well as new transmission and generation infrastructure.”