Jefferies’ Top Crowded Semiconductor Short Positions: Top 10 Stocks

7. Lam Research Corporation (NASDAQ:LRCX)

Number of Hedge Fund Holders In Q2 2024: 84

Shares Short % Of Outstanding: 2.49%

Lam Research Corporation (NASDAQ:LRCX) is one of the few companies in the world that makes and sells products that are used in several phases of semiconductor fabrication. These phases include etching, deposition, and managing intra-chip connecting circuits called interconnects. Its product portfolio also makes Lam Research Corporation (NASDAQ:LRCX) a good example of a chip stock that is struggling these days even though AI optimism still persists on Wall Street. The shares are down 2.58% year to date due to multiple factors. Firstly, during its fiscal 2024, 42% of Lam Research Corporation (NASDAQ:LRCX)’s revenue came from the memory industry. This industry has struggled in 2023 and has been on a slow recovery this year which hasn’t helped ignite investor consequences. Secondly, 42% of its revenue came from China, where not only have economic struggles hurt Lam Research Corporation’s (NASDAQ:LRCX) revenue but investors are also wary of future sanctions.

Artisan Partners mentioned Lam Research Corporation (NASDAQ:LRCX) in its Q2 2024 investor letter. Here is what the fund said:

“The top contributors to performance for the quarter were Alphabet, Lam Research Corporation (NASDAQ:LRCX) and Elevance. Lam Research shares rose 10% during the quarter and are up 67% over the past year, primarily due to optimism around the pending investment cycle in semiconductor capital expenditures. Lam is one of the largest equipment manufacturers used to make semiconductor chips. This equipment, commonly referred to as WFE (wafer fabrication equipment), is expected to experience significant growth due to a combination of a cyclical rebound in memory chips and growing demand for new AI-related chips. Lam’s product portfolio is particularly well positioned to benefit from both trends and should grow even faster than the overall market. Its shares now trade at ~30X prior peak earnings, which suggests this dynamic is well understood by the market and is mostly priced in.”