We recently published a list of 10 AI News and Ratings Investors Should Take a Look At. In this article, we are going to take a look at where Lam Research Corporation (NASDAQ:LRCX) stands against other AI news and ratings investors should take a look at.
As AI continues to reshape industries, investors are closely watching how companies allocate capital during concerns over high valuations. According to some experts, despite market fluctuations, businesses are unlikely to cut AI investments significantly, as the technology’s long-term impact is still unfolding. The comparison to the dot-com era raises questions about sustainability, but many see AI as an innovation cycle that will drive broader economic growth.
Balancing AI Growth with Market Valuation Concerns
Marta Norton, chief investment strategist at Empower, believes companies are unlikely to significantly alter their AI-related spending despite concerns over high valuations, especially as DeepSeek raises questions about supply chains. She discussed this on Bloomberg Technology with Caroline Hyde and Mike Shepard, emphasizing that the market is still in an AI investment race and earnings reports will be key in determining future spending patterns.
She noted that recent market reactions have been more about valuation concerns than doubts about AI itself. While Nvidia remains central to AI supply chains, the debate is now shifting to whether businesses need to keep spending at the current pace. Comparing the situation to the dot-com era, Norton acknowledged the risks of high valuations but pointed out that major technological shifts, like AI, can drive long-term economic expansion, similar to how the internet transformed industries.
On the potential impact of cheaper AI solutions, she suggested that businesses, including retailers and software firms, could benefit from faster, more efficient deployments. However, she cautioned that these effects may take time to materialize rather than being immediately reflected in quarterly earnings. Addressing concerns about broader market disruption, she acknowledged vulnerabilities in major tech stocks but argued that the fundamental case for AI remains strong, with the primary uncertainty revolving around supply chains rather than AI adoption itself.
For this article, we selected AI stocks by reviewing news articles, stock analysis, and press releases. We listed the stocks in ascending order of their hedge fund sentiment taken from Insider Monkey’s database of 900 hedge funds.
Why are we interested in the stocks that hedge funds pile into? The reason is simple: our research has shown that we can outperform the market by imitating the top stock picks of the best hedge funds. Our quarterly newsletter’s strategy selects 14 small-cap and large-cap stocks every quarter and has returned 275% since May 2014, beating its benchmark by 150 percentage points (see more details here).
A technician operating an automated semiconductor processing machine with laser accuracy.
Lam Research Corporation (NASDAQ:LRCX)
Number of Hedge Fund Holders: 58
Lam Research Corporation (NASDAQ:LRCX) designs and manufactures semiconductor processing equipment for integrated circuit fabrication, offering a range of systems for deposition, etching, cleaning, and wafer applications globally.
On January 30, Cantor Fitzgerald upgraded Lam Research (NASDAQ:LRCX) to Overweight from Neutral, raising its price target to $100 from $95. The firm highlighted strong recent performance, including an earnings beat and expectations for wafer fabrication equipment growth of about 5% in the calendar year 2025. Lam is expected to outgrow wafer fabrication equipment with a notable uptick in NAND, Gate-All-Around/Advanced Packaging revenue growth, and strong leverage to Taiwan Semiconductor Manufacturing Company throughout 2025.
Cantor Fitzgerald has revised its earnings per share estimate to $3.85 for the CY 2025, above consensus, and anticipates a further acceleration in earnings per share to $4.65+ in the CY 2026. With the stock trading at approximately 20 times CY 2025 earnings per share, the firm views the risk/reward as favorable as it mentioned potential upside and a solid catalyst pipeline, including an Analyst Day in three weeks.
Overall, LRCX ranks 3rd on our list of AI news and ratings investors should take a look at. While we acknowledge the potential of LRCX as an investment, our conviction lies in the belief that AI stocks hold greater promise for delivering higher returns and doing so within a shorter time frame. If you are looking for an AI stock that is more promising than LRCX but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
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Disclosure: None. This article is originally published at Insider Monkey.
