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

We think Lam Research (LRCX) stock might be a good investment candidate. Why? Because you get a strong margin, a 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 stock can run given its good fundamentals and the fact that it is 15% below its 52-week high.

Lam Research’s strong operating margins are bolstered by its leadership in advanced etch and deposition technologies, with the Aqara system doubling its installed base, demonstrating robust product demand. The company maintains a low-debt capital structure, reflected by a 0.37 debt-to-equity ratio and significant share repurchases. Momentum is strong; Q4 2025 marked the tenth consecutive quarter of revenue growth, supported by the accelerating AI market and a projected 40% growth in advanced packaging for 2026. Management forecasts 2026 Wafer Fabrication Equipment (WFE) spending to reach $135 billion, up 23% from 2025, with Q1 2026 revenue guidance set above analyst estimates. While the stock reached an all-time high of $248.17 on January 29, 2026, it closed at $209.78 on February 4, 2026.

And Its Fundamentals Look Good

• Long-Term Profitability: About 33.2% operating cash flow margin and 30.3% operating margin last 3-year average.
• Strong Momentum: Currently in the top 10th percentile of stocks in terms of “trend strength”—our proprietary momentum metric.
• Revenue Growth: Lam Research saw revenue growth of 26.8% LTM and 5.1% for the last 3-year average, but this is not a growth story
• Room To Run: Despite its momentum, LRCX stock is trading 15% 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, and 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. Applied Materials (AMAT)
2. KLA (KLAC)
3. Amphenol (APH)

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 fulfill 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%

Portfolios Are The Smarter Way To Invest

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.