Lam Research Stock Fell 5.9% In A Day. What To Do Now?

Lam Research (LRCX) stock is down 5.9% in a day. The stock looks fairly priced at the moment, though history suggests you may benefit from buying dips. Consider the following data:

• Size: Lam Research is a $179 Bil company with $18 Bil in revenue currently trading at $140.35.
• Fundamentals: Last 12 month revenue growth of 23.7% and operating margin of 32.0%.
• Liquidity: Has Debt to Equity ratio of 0.03 and Cash to Assets ratio of 0.3
• Valuation: Lam Research stock is currently trading at P/E multiple of 33.4 and P/EBIT multiple of 29.1
• Has returned (median) 168% within a year following sharp dips since 2010. See LRCX Dip Buy Analysis.

While we like to buy dips if the fundamentals check out – for LRCX, see Buy or Sell LRCX Stock – we are wary of falling knives. Specifically, it is worth trying to answer if things get really bad, and LRCX drops another 20-30% to $98 levels, will we be able to hold on to the stock? What is the worst case scenario? We call it downturn resilience. Turns out, the stock has fared worse than the S&P 500 index during various economic downturns. We assess this based on both (a) how much the stock fell and, (b) how quickly it recovered.

LRCX stock has fallen meaningfully recently and we currently find it fairly priced. This may feel like a caution, and there is significant risk in relying on a single stock. However, there is a huge value to a broader diversified approach we take with Trefis High Quality Portfolio. Trefis works with Empirical Asset Management – a Boston area wealth manager – whose asset allocation strategies yielded positive returns during the 2008-09 period when the S&P lost more than 40%. Empirical has incorporated the Trefis HQ Portfolio in this asset allocation framework to provide clients better returns with less risk versus the benchmark index; less of a roller-coaster ride, as evident in HQ Portfolio performance metrics.

Below are the details, but before that, as a quick background: LRCX provides semiconductor processing equipment and services for integrated circuit fabrication to customers worldwide, including the US, China, Europe, Japan, Korea, Southeast Asia, and Taiwan.

2022 Inflation Shock

• LRCX stock fell 56.8% from a high of $72.98 on 14 January 2022 to $31.50 on 14 October 2022 vs. a peak-to-trough decline of 25.4% for the S&P 500.
• However, the stock fully recovered to its pre-Crisis peak by 11 December 2023
• Since then, the stock increased to a high of $149.15 on 6 October 2025 , and currently trades at $140.35

 
2020 Covid Pandemic

• LRCX stock fell 45.0% from a high of $34.16 on 13 February 2020 to $18.79 on 20 March 2020 vs. a peak-to-trough decline of 33.9% for the S&P 500.
• However, the stock fully recovered to its pre-Crisis peak by 14 July 2020

 
2018 Correction

• LRCX stock fell 46.1% from a high of $22.87 on 12 March 2018 to $12.33 on 24 December 2018 vs. a peak-to-trough decline of 19.8% for the S&P 500.
• However, the stock fully recovered to its pre-Crisis peak by 9 September 2019

 
2008 Global Financial Crisis

• LRCX stock fell 75.0% from a high of $6.00 on 17 July 2007 to $1.50 on 19 November 2008 vs. a peak-to-trough decline of 56.8% for the S&P 500.
• However, the stock fully recovered to its pre-Crisis peak by 23 May 2014

 
Worried that LRCX could fall much more? You could take a look at the Trefis High Quality (HQ) Portfolio, with a collection of 30 stocks, has a track record of comfortably outperforming its benchmark that includes all 3 – the S&P 500, S&P mid-cap, and Russell 2000 indices. Why is that? As a group, HQ Portfolio stocks provided better returns with less risk versus the benchmark index; less of a roller-coaster ride, as evident in HQ Portfolio performance metrics.