Would You Still Hold Lam Research Stock If It Fell Another 30%?

Lam Research (LRCX) stock is down 5.0% in a day. The recent slide reflects an analyst downgrade fueled by concerns for slowing growth in China and NAND memory, but sharp drops like this often raise a tougher question: is the weakness temporary, or a sign of deeper cracks in the story?

Before judging its downturn reslience, let’s look at where Lam Research stands today.

• Size: Lam Research is a $194 Bil company with $20 Bil in revenue currently trading at $153.32.
• Fundamentals: Last 12 month revenue growth of 25.7% and operating margin of 33.0%.
• Liquidity: Has Debt to Equity ratio of 0.02 and Cash to Assets ratio of 0.31
• Valuation: Lam Research stock is currently trading at P/E multiple of 33.4 and P/EBIT multiple of 28.9
• Has returned (median) 179% within a year following sharp dips since 2010. See LRCX Dip Buy Analysis.

These metrics point to a Strong operational performance, alongside High valuation – making the stock Fairly Priced.

That brings us to the key consideration for investors worried about this fall: how resilient is LRCX stock if markets turn south? While we like to buy dips when the fundamentals check out (see Buy or Sell LRCX Stock) – we stay wary of potential falling knives.

This is where our downturn resilience framework comes in. Suppose LRCX stock falls another 20-30% to $107 – can investors comfortably hold on? Turns out, the stock has fared worse than the S&P 500 index during various economic downturns, based on (a) how much the stock fell and, (b) how quickly it recovered. Individual stocks can soar or tank but one thing matters: staying invested. High Quality Portfolio helps you do that.

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 $166.37 on 10 November 2025 , and currently trades at $153.32

 
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

 
It is a good thing to keep in mind how low LRCX could go during a downturn. And you should also check how the stock fared when compared with 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.