What Could Light a Fire Under Lam Research Stock

Lam Research has shown remarkable bullish momentum, with more than a dozen rallies exceeding 30% within two months, particularly in years like 2010 and 2025. Four of these surges surpassed 50%, underscoring the stock’s potential for rapid gains. If historical patterns hold, upcoming catalysts might drive LRCX shares to significant new highs, rewarding investors who capitalize on these powerful upswings.

Specifically, we see these catalysts:

1. AI-Driven Demand for Advanced Logic & HBM
2. NAND Upgrade Cycle to 200+ Layers
3. Advanced Packaging & GAA SAM Expansion

Catalyst 1: AI-Driven Demand for Advanced Logic & HBM

• Details: Sustains strong leading-edge foundry and DRAM spending, Estimated $8B in wafer fab equipment (WFE) for every $100B of data center investment,
• Segment Affected: Foundry & DRAM Systems
• Potential Timeline: Throughout 2026
• Evidence: AI-related demand creating multi-year inflection in equipment spending, High-Bandwidth Memory (HBM) investments driving strong DRAM demand,

Catalyst 2: NAND Upgrade Cycle to 200+ Layers

• Details: Unlocks over $40 billion in multi-year upgrade spending, Drives record revenue for Customer Support Business Group (CSBG),
• Segment Affected: Customer Support Business Group (CSBG) & NAND Systems
• Potential Timeline: Multi-year starting H2 2025
• Evidence: Management confirmation of $40B+ upgrade opportunity for capacity above 200 layers, Over 75% of this upgrade spend is Lam’s served available market, Recent key multi-generation etch tool win at major NAND customer,

Catalyst 3: Advanced Packaging & GAA SAM Expansion

• Details: Expands Served Available Market (SAM) to mid-30s percent of WFE, Potential to grow SAM to high 30% range long-term,
• Segment Affected: Foundry & Logic Systems
• Potential Timeline: Mid-2026 and Beyond
• Evidence: Product portfolio aligned with key inflections like Gate-All-Around (GAA) and backside power, Market share in advanced packaging (Saber 3D) growing nearly five points YoY, New innovations in dry EUV photoresist and panel-level packaging cited by sell-side,

But The Stock Is Not Without Its Risks

Here are specific risks we see:

• Imminent China Revenue Collapse
• Executive Exodus Signals Cycle Peak
• Deteriorating Cash Conversion Cycle

Looking at historical drawdown during market crises is another lens to look at risk.

LRCX fell about 75% in both the Dot-Com bust and Global Financial Crisis. It dropped 56% in the inflation shock and around 45% during 2018 and Covid corrections. Risk is real.

Read LRCX Dip Buyer Analyses to see how the stock has recovered from sharp dips in the past.

Reference: Current Fundamentals

• Revenue Growth: 25.7% LTM and 4.0% last 3-year average.
• Cash Generation: Nearly 28.3% free cash flow margin and 33.0% operating margin LTM.
• Valuation: Lam Research stock trades at a P/E multiple of 47.5

*LTM: Last Twelve Months | If you want more details, read Buy or Sell LRCX Stock.

Still not convinced about LRCX stock? Consider Portfolio Approach

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