5. Lam Research Corporation (NASDAQ:LRCX)
Number of Hedge Fund Investors: 84
Jim Cramer believes that Lam Research Corporation (NASDAQ:LRCX) is significantly undervalued and could potentially rebound strongly, with the possibility of a 200-point increase despite a potential 50-point drop. He agreed with a viewer’s view on Lam Research Corporation (NASDAQ:LRCX), emphasizing his extensive experience with Lam Research Corporation (NASDAQ:LRCX) compared to current traders. Cramer advised against trying to follow the recent tech sell-off, as it often leads to wasted effort and financial losses.
“I think Lam is dramatically oversold. I think it could be a coiled spring. Maybe it has 50 points down, but I think it could have 200 points up. I agree with you, and I’ve known the company for a very long time, certainly more than the traders who are dumping it right now. So anyway, don’t try to chase this move out of tech, please. I’ve seen this kind of thing before, it’s just not worth your effort. It will only result in you churning your dollars and losing money.”
Lam Research Corporation (NASDAQ:LRCX) presents a strong case for growth, thanks to its solid performance in the semiconductor sector and multiple growth opportunities. Lam Research Corporation (NASDAQ:LRCX) has consistently exceeded market expectations, as shown by its Q4 fiscal 2024 earnings report, where it posted $3.87 billion in revenue and an EPS of $7.78, both higher than predicted.
Key factors driving this growth include the increasing demand for AI-powered chips, high-bandwidth memory (HBM), 3D DRAM, and advanced packaging technologies. Additionally, rising demand for NAND memory, driven by technological advancements, plays a significant role, with Lam Research Corporation (NASDAQ:LRCX) leading in NAND etching technology.
Lam Research Corporation (NASDAQ:LRCX)’s strategic focus on research and development (R&D) and expanded production capabilities position it well to take advantage of these industry trends. Further boosting confidence, hedge funds, institutional investors, and positive analyst ratings reflect a strong belief in Lam Research Corporation (NASDAQ:LRCX)’s long-term growth potential. With the AI and memory markets on the rise, Lam Research Corporation (NASDAQ:LRCX) is well-positioned for continued earnings growth in the future.
Artisan Select Equity Fund stated the following regarding Lam Research Corporation (NASDAQ:LRCX) in its Q2 2024 investor letter:
“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.”
