Momentum Meets Value: Lam Research Stock Stock Could Be A Good Buy

We think Lam Research (LRCX) stock might be a good investment candidate. Why? Because you get strong margin, low-debt capital structure, and strong momentum – with room to run as the stock is meaningfully below its 52-week high.

There Are Several Things In Favor Of LRCX Stock

LRCX is up 107% so far this year, but can still run more given its good fundamentals and the fact that it is 11% below its 52 week high. Recent performance reinforces this view; strong customer demand for AI-driven memory and gate-all-around architecture tools has propelled record Q3 calendar 2025 operating margins to 35.0%. Long-term debt declined to $3.73 billion by September 2025, reflecting a low-debt profile. Momentum is evident with a 2025 Wafer Fabrication Equipment (WFE) spending outlook raised to $105 billion, driven by increased orders for advanced deposition and etch products, alongside new product adoption like SABRE 3D. The stock has gained over 100% year-to-date, despite a recent modest dip, with guidance for Q4 calendar 2025 revenue exceeding consensus.

And Its Fundamentals Look Good

• Long-Term Profitability: About 32.5% operating cash flow margin and 30.2% operating margin last 3 year average.
• Strong Momentum: Currently in top 10 percentile of stocks in terms of “trend strength” – our proprietary momentum metric.
• Revenue Growth: Lam Research saw revenue growth of 25.7% LTM and 4.0% last 3 year average, but this is not a growth story
• Room To Run: Despite its momentum, LRCX stock is trading 11% below its 52-week high.

Below is a quick comparison of LRCX fundamentals with S&P medians.

*LTM: Last Twelve Months

But Be Wary Of The Risks

While LRCX stock may be a compelling investment opportunity, it’s always helpful to be aware of a stock’s history of drawdown. LRCX plunged 75% in the Dot-Com crash and nearly 75% again during the Global Financial Crisis. The 2022 inflation shock wasn’t kind either, with a drop around 56%. Even the more recent pullbacks — 2018 correction and Covid sell-off — saw losses close to 45%. The stock’s strong fundamentals matter, but history shows that severe market turbulence hits hard no matter what. But the risk is not limited to major market crashes. Stocks fall even when markets are good – think events like earnings, business updates, outlook changes. Read LRCX Dip Buyer Analyses to see how the stock has recovered from sharp dips in the past.

If you want to see more details, read Buy or Sell LRCX Stock.

LRCX Is Just One of Several Such Stocks

You could also check out:

1. Newmont (NEM)
2. Ubiquiti (UI)
3. BWX Technologies (BWXT)

We chose these stocks using the following criteria:

1. Greater than $2 Bil in market cap
2. High operating or (cash flow from operations) margins
3. No instance of very large revenue decline in the past 5 years
4. Low-debt capital structure
5. Strong momentum

A portfolio that was built starting 12/31/2016 with stocks that fulfil the criteria above would have performed as follows:

• Average 12-month forward returns of nearly 15%
• 12-month win rate (percentage of picks returning positive) of about 60%

The Right Way To Go About Investing Is Through Portfolios

Individual stocks can soar or tank but one thing matters: staying invested. The right portfolio can help you stay invested, capture upside and mitigate the downside associated with any individual stock.

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.