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9. Lam Research Corporation (NASDAQ:LRCX)

Number of Hedge Fund Holders In Q3 2024: 58

Lam Research Corporation (NASDAQ:LRCX) is an American semiconductor manufacturing hardware provider. The firm’s equipment is used in several stages of the chip manufacturing supply chains such as etching. Consequently, Lam Research Corporation (NASDAQ:LRCX) is exposed to the broader semiconductor industry instead of simply being limited to the AI industry. This is also reflected in the stock as the shares are down 5.4% year-to-date. Lam Research Corporation (NASDAQ:LRCX)’s investors are also uncertain because of the firm’s exposure to China and its reliance on the memory industry. As an illustration, consider the fact that during the firm’s fiscal year 2024, 42% of its revenue was from China and $14.9 billion came from memory chips. Tensions between the US and China, particularly those surrounding semiconductor technology stand to restrict Lam Research Corporation (NASDAQ:LRCX)’s sales, and only the very high-end memory sector benefits from AI demand.

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.”