Is Lam Research a Better Buy Than Teradyne?
Even as Teradyne surged 22% during the past Week, its peer Lam Research may be a better choice. Consistently evaluating alternatives is core to sound investment approach. Lam Research (LRCX) stock offers superior revenue growth across key periods, better profitability, and relatively lower valuation vs Teradyne (TER) stock, suggesting you may be better off investing in LRCX
- LRCX’s quarterly revenue growth was 27.7%, vs. TER’s -10.7%.
- In addition, its Last 12 Months revenue growth came in at 25.7%, ahead of TER’s 4.6%.
- LRCX leads on profitability over both periods – LTM margin of 33.0% and 3-year average of 30.2%.
A single stock can be risky, but there is a huge value to a broader, diversified approach. If you seek an upside with less volatility than holding an individual stock, consider the Trefis High Quality Portfolio (HQ). HQ has outperformed its benchmark — a combination of S&P 500, Russell, and S&P midcap index — and achieved returns exceeding 91% since its inception. Risk management is key — consider what the long-term portfolio performance could be if you blended 10% commodities, 10% gold, and 2% crypto with HQ’s performance metrics.
TER provides test solutions for semiconductor, system, industrial automation, and wireless device development, including smartphones, tablets, laptops, peripherals, and IoT devices. LRCX designs, manufactures, and services semiconductor processing equipment for integrated circuit fabrication, serving the global semiconductor industry including the US, Asia, and Europe.
Valuation & Performance Overview
| TER | LRCX | Preferred | |
|---|---|---|---|
| Valuation | |||
| P/EBIT Ratio | 52.1 | 31.5 | LRCX |
| Revenue Growth | |||
| Last Quarter | -10.7% | 27.7% | LRCX |
| Last 12 Months | 4.6% | 25.7% | LRCX |
| Last 3 Year Average | -5.8% | 4.0% | LRCX |
| Operating Margins | |||
| Last 12 Months | 19.2% | 33.0% | LRCX |
| Last 3 Year Average | 20.2% | 30.2% | LRCX |
| Momentum | |||
| Last 3 Year Return | 115.0% | 310.5% | TER |
Note: For “Last 3 Year Return” metric, preferred stock is one with higher returns unless the returns are too high (>300%) which creates risk of sell off.
See more revenue details: TER Revenue Comparison | LRCX Revenue Comparison
See more margin details: TER Operating Income Comparison | LRCX Operating Income Comparison
But do these numbers tell the full story? Read Buy or Sell LRCX Stock to see if Lam Research’s edge holds up under the hood or if Teradyne still has cards to play (see Buy or Sell TER Stock).
Historical Market Performance
| 2020 | 2021 | 2022 | 2023 | 2024 | 2025 | Total [1] | Avg | Best | |
|---|---|---|---|---|---|---|---|---|---|
| Returns | |||||||||
| TER Return | 77% | 37% | -46% | 25% | 17% | 39% | 117% | ||
| LRCX Return | 64% | 54% | -41% | 89% | -7% | 125% | 456% | <=== | |
| S&P 500 Return | 16% | 27% | -19% | 24% | 23% | 16% | 110% | ||
| Monthly Win Rates [3] | |||||||||
| TER Win Rate | 58% | 58% | 50% | 58% | 67% | 56% | 58% | ||
| LRCX Win Rate | 67% | 67% | 33% | 58% | 42% | 56% | 54% | ||
| S&P 500 Win Rate | 58% | 75% | 42% | 67% | 75% | 67% | 64% | <=== | |
| Max Drawdowns [4] | |||||||||
| TER Max Drawdown | -35% | -13% | -56% | -5% | -12% | -46% | -28% | ||
| LRCX Max Drawdown | -36% | 0% | -56% | -1% | -10% | -18% | -20% | ||
| S&P 500 Max Drawdown | -31% | -1% | -25% | -1% | -2% | -15% | -12% | <=== | |
[1] Cumulative total returns since the beginning of 2020
[2] 2025 data is for the year up to 10/30/2025 (YTD)
[3] Win Rate = % of calendar months in which monthly returns were positive
[4] Max drawdown represents maximum peak-to-trough decline within a year
No matter how good the numbers, stock investment is never a smooth ride. There is a risk you must factor in. Read LRCX Dip Buyer Analyses and TER Dip Buyer Analyses to see how these stocks have fallen and recovered in the past.
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.