- Assessing Lam Research (LRCX) Valuation After AI Infrastructure Momentum And Analyst Upgrades
May 11, 2026
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Lam Research (LRCX) is back in focus after a string of upbeat earnings results, stronger demand across semiconductor end markets, and supportive analyst commentary related to AI infrastructure and global foundry expansion.
See our latest analysis for Lam Research.
The recent 2.63% 1 day share price return, on top of a 58.89% year to date share price return and a very large 1 year total shareholder return, suggests momentum has been building as investors respond to strong results, rising AI infrastructure spending and analyst upgrades.
If Lam Research's run has you thinking about where AI chip demand could benefit other companies, it may be worth scanning 38 AI infrastructure stocks
With Lam Research up 58.89% year to date and trading only about 6% below the average analyst price target of US$310.47, the key question now is whether there is still a buying opportunity here or if the market is already pricing in future growth.
Most Popular Narrative: 5% Undervalued
At a last close of $294.05 versus a narrative fair value of $309.52, Lam Research is framed as modestly undervalued, with that view resting heavily on AI driven wafer fab equipment demand and margin assumptions.
Rapidly rising AI workloads and the associated need for higher storage, bandwidth, and processing power are accelerating the adoption of advanced chip architectures (such as gate-all-around, 3D NAND, and advanced packaging). This increases demand for Lam's etch and deposition tools, supporting sustained revenue growth and robust order visibility.
Read the complete narrative.
Curious what earnings path and margin profile justify that fair value uplift, and how long analysts think this AI equipment cycle can support it? The narrative spells out the growth, profitability and valuation multiple assumptions that sit behind the $309.52 figure.
Result: Fair Value of $309.52 (UNDERVALUED)
Have a read of the narrative in full and understand what's behind the forecasts.
However, this AI driven setup still faces real pressure points, including heavy exposure to China related regulation and concentrated spending by a small group of major chipmakers.
Find out about the key risks to this Lam Research narrative.
Another Take: Earnings Multiple Flips The Story
That 5% narrative undervaluation sits awkwardly alongside how the stock is actually priced. On a P/E of 54.8x, Lam Research trades above its own estimated fair ratio of 47.5x and above a peer average of 51.7x, even if it is below the broader US Semiconductor industry at 59.8x. For investors, that gap points to less cushion and more need to test how confident they are in the AI and wafer fab equipment assumptions already baked into the price.
Story Continues
See what the numbers say about this price — find out in our valuation breakdown.NasdaqGS:LRCX P/E Ratio as at May 2026
Next Steps
With sentiment clearly split between opportunity and risk, it makes sense to move quickly and stress test the data yourself. You can start with the company's 3 key rewards and 1 important warning sign
Looking for more investment ideas?
If Lam Research has sharpened your interest in AI and chip equipment, do not stop here. Broaden your watchlist before the next big move slips by.
Target potential value opportunities by scanning 49 high quality undervalued stocks that pair solid fundamentals with prices that may not fully reflect their financial profile. Strengthen your income stream by reviewing 12 dividend fortresses featuring companies that currently offer higher yields alongside established payout histories. Protect your downside by focusing on 71 resilient stocks with low risk scores where balance sheets, volatility and risk metrics all work in your favor.
This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.
Companies discussed in this article include LRCX.
Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team@simplywallst.com
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- BofA is Bullish on MKS Inc. (MKSI)
May 11, 2026
MKS Inc. (NASDAQ:MKSI) is one of the
12 Best Photonics Stocks to Buy Now.
On April 28, 2026, BofA analyst Michael Mani hiked its price objective on MKS Inc. (NASDAQ:MKSI) to $330 from $300. It kept a Buy rating on the shares. The firm raised projections for semiconductor capital equipment names based on “strong” Lam Research results, stating that “higher industry forecasts…should precede broad-based upward estimate revisions,” as reported.BofA is Bullish on MKS Inc. (MKSI)
MKS Inc. (NASDAQ:MKSI) in its first-quarter 2026 projection expects revenue of $1.04 billion, plus or minus $40 million, with a gross margin of 46.0%, plus or minus 1.0%. The company also sees non-GAAP operating expenses of $270 million, a plus or minus $5 million. Non-GAAP net earnings are expected to be $136 million, plus or minus $19 million, according to the statement. It estimates non-GAAP earnings per diluted share of $2.00, plus or minus $0.28, and adjusted EBITDA of $251 million, plus or minus $24 million.
MKS Inc. (NASDAQ:MKSI) is a firm that provides instruments, systems, subsystems, and process control solutions. It operates through three segments: VSD, PSD, and MSD.
While we acknowledge the potential of MKSI as an investment, we believe certain AI stocks offer greater upside potential and carry less downside risk. If you're looking for an extremely undervalued AI stock that also stands to benefit significantly from Trump-era tariffs and the onshoring trend, see our free report on the best short-term AI stock.
READ NEXT: 33 Stocks That Should Double in 3 Years and Cathie Wood 2026 Portfolio: 10 Best Stocks to Buy.
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- Lam Research Stock Trades Near 52-Week High: Buy More or Book Profits?
May 11, 2026
Lam Research Corporation LRCX shares have been outperformers in the broader semiconductor industry, powered by solid financial health and strong demand for its wafer fabrication equipment and services used for chip manufacturing. The stock closed at $294.05 on May 8, closer to its recently hit 52-week high of $298, reflecting strong investor confidence in LRCX’s prospects.
Lam Research shares have soared 257.5% over the trailing 12 months, outperforming the broader Zacks Electronics – Semiconductor industry’s 105.2% surge. The impressive rally in the share price has placed LRCX among the top performers in the semiconductor space.
The stock has also outpaced the gains of other major semiconductor equipment providers, including Applied Materials, Inc. AMAT, KLA Corporation KLAC and ASML Holding N.V. ASML. Over the trailing 12 months, shares of Applied Materials, KLA Corporation and ASML Holding have surged 159.2%, 145.8% and 112.2%, respectively.
This outperformance shows investors are becoming increasingly confident in Lam Research’s long-term story, even in a volatile market shaped by trade conflicts and geopolitical risks. We believe this momentum is grounded in strong fundamentals, and LRCX’s long-term outlook justifies a buy position for now.
Lam Research One-Year Price Return PerformanceZacks Investment Research
Image Source: Zacks Investment Research
AI Boom Keeps Driving Lam Research’s Prospects
Lam Research is capitalizing on artificial intelligence (AI) trends. It builds the tools chipmakers need to manufacture next-generation semiconductors, including high-bandwidth memory (HBM) and chips used in advanced packaging. These technologies are vital for powering AI and cloud data centers.
Lam Research’s products are not only critical but also innovative. For example, its ALTUS ALD tool uses molybdenum to improve speed and efficiency in chip production. Another product, the Aether platform, helps chipmakers achieve higher performance and density. These are essential capabilities as demand for advanced AI chips continues to increase.
In 2025, Lam Research’s revenues from advanced packaging grew significantly, and management anticipates more than 50% year-over-year growth for 2026. The industry’s migration to backside power distribution and dry-resist processing presents growth opportunities for LRCX’s cutting-edge fabrication solutions.
These trends are aiding Lam Research’s financial performance. The company has demonstrated consistent execution, maintaining quarterly revenues of more than $5 billion for the past four consecutive quarters, reflecting solid demand from leading chipmakers such as Taiwan Semiconductor Manufacturing and Samsung.
Story Continues
Lam Research’s Financial Results Show Real Strength
Despite ongoing macroeconomic challenges, geopolitical issues, and trade and tariff wars, LRCX’s financials remain impressive. In the company’s last reported financial results for the third quarter of fiscal 2026, total revenues rose 24% year over year to $5.84 billion and beat the Zacks Consensus Estimate by 1.3%, primarily driven by continued demand across the Systems and Customer Support Business Group segments.
Lam Research reported third-quarter non-GAAP earnings of $1.47 per share, which topped the consensus mark by 8.1%. The bottom line also increased 41.3% on a year-over-year basis.
Lam Research Corporation Price, Consensus and EPS SurpriseLam Research Corporation Price, Consensus and EPS Surprise
Lam Research Corporation price-consensus-eps-surprise-chart | Lam Research Corporation Quote
Expanding its manufacturing operations in Asia has helped the company lower costs and improve margins. In the third quarter, Lam Research’s non-GAAP operating margin rose to 35%, up 220 basis points from the year-ago quarter, which is impressive, considering the challenging macroeconomic environment.
This strong financial performance reinforces Lam Research’s resilience in navigating an evolving semiconductor cycle. As demand grows for advanced nodes, LRCX’s specialized technology in etch and deposition tools for high-aspect-ratio structures positions it well to capitalize on this trend. The company’s third-quarter results also highlight its effective cost management, which has enabled sustained profitability.
With AI-driven investments accelerating, Lam Research’s leading position in etch and deposition makes it a key beneficiary of the ongoing semiconductor spending cycle. The Zacks Consensus Estimate for fiscal 2026 and 2027 revenues implies a year-over-year increase of 25% and 29.7%, respectively. The consensus mark for fiscal 2026 and 2027 earnings per share indicates growth of 37% and 36.2%, respectively.
LRCX’s Steady Growth Outlook Justifies Premium Valuation
Valuation-wise, Lam Research is overvalued, as suggested by the Zacks Value Score of F.
In terms of forward 12-month Price/Earnings (P/E), LRCX shares are trading at 39.52X, higher than the sector’s 35.53X. However, we believe that the company’s steady earnings growth and rising AI-linked demand justify the premium valuation.
Lam Research Forward 12-Month P/E RatioZacks Investment Research
Image Source: Zacks Investment Research
Compared with major semiconductor equipment providers, LRCX trades at a higher P/E multiple than KLAC, ASML and AMAT. At present, KLA Corporation, ASML Holding and Applied Materials have forward 12-month P/E multiples of 38.94, 38.85 and 34.29, respectively.
Conclusion: Buy LRCX Stock for Now
Lam Research’s strong technological foundation and strategic focus on high-growth markets like AI and HPC make it a compelling long-term investment. The company’s innovation and operational efficiency provide a solid foundation for future growth. Considering these factors, accumulating LRCX stock appears to be the most prudent strategy for investors.
Lam Research carries a Zacks Rank #2 (Buy) at present. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
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This article originally published on Zacks Investment Research (zacks.com).
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- Is It Too Late To Consider Lam Research (LRCX) After Its Huge 1 Year Surge?
May 9, 2026
Get insights on thousands of stocks from the global community of over 7 million individual investors at Simply Wall St.
If you are wondering whether Lam Research stock still offers value after such a strong run, or if you might be late to the story, this article walks through what the current price could mean for potential risk and reward. Lam Research recently closed at US$286.41, with returns of 11.1% over 7 days, 27.7% over 30 days, 54.8% year to date and 285.2% over 1 year. The 3 year return sits at 458.9% and the 5 year return at 416.7%. Several recent headlines have focused on Lam Research in the context of chip equipment makers and their role in supporting long term semiconductor demand. This helps frame how investors are thinking about future orders and capital spending. News coverage has also highlighted how sentiment around the sector can shift quickly as expectations about technology adoption and investment cycles change. Despite these strong return figures, Lam Research currently has a valuation score of 1/6. The next sections will look at different valuation approaches and then finish with a way to put those models into a broader investing context.
Lam Research scores just 1/6 on our valuation checks. See what other red flags we found in the full valuation breakdown.
Approach 1: Lam Research Discounted Cash Flow (DCF) Analysis
A Discounted Cash Flow, or DCF, model projects a company’s future cash flows and then discounts those projections back to today’s dollars to estimate what the entire business could be worth now.
For Lam Research, the model uses last twelve month Free Cash Flow of about $6.13b and a 2 Stage Free Cash Flow to Equity approach. Analysts provide explicit forecasts out to 2030, with projected Free Cash Flow of $13.02b in that year. Beyond the near term, Simply Wall St extrapolates additional annual cash flows out to 2035 based on those inputs.
After discounting these projected cash flows back to today, the DCF model arrives at an estimated intrinsic value of $126.77 per share. Compared with the recent share price of $286.41, this implies the stock is about 125.9% above the model’s estimate, which identifies Lam Research as overvalued on this cash flow view alone.
Result: OVERVALUED
Our Discounted Cash Flow (DCF) analysis suggests Lam Research may be overvalued by 125.9%. Discover 51 high quality undervalued stocks or create your own screener to find better value opportunities.LRCX Discounted Cash Flow as at May 2026
Head to the Valuation section of our Company Report for more details on how we arrive at this Fair Value for Lam Research.
Story Continues
Approach 2: Lam Research Price vs Earnings
For a profitable company, the P/E ratio is a useful way to think about what you are paying for each dollar of earnings. It reflects not just current profits, but what the market collectively expects in terms of future growth and how risky those earnings might be. Higher growth and lower perceived risk tend to support a higher, or more generous, P/E ratio, while slower growth or higher uncertainty usually point to a lower, or more cautious, multiple.
Lam Research currently trades on a P/E of 53.39x. That sits below the Semiconductor industry average of 59.42x, but above the peer group average of 49.81x. Simply Wall St also calculates a proprietary “Fair Ratio” for Lam Research of 47.95x, which estimates the P/E that could be reasonable given the company’s earnings growth profile, industry, profit margins, market cap and specific risks.
This Fair Ratio goes a step further than a simple comparison with peers or the broad industry because it adjusts for company specific factors rather than assuming that every stock in the group deserves the same multiple. Compared with this Fair Ratio of 47.95x, Lam Research’s current P/E of 53.39x screens as richer than what the model suggests.
Result: OVERVALUEDNasdaqGS:LRCX P/E Ratio as at May 2026
P/E ratios tell one story, but what if the real opportunity lies elsewhere? Start investing in legacies, not executives. Discover our 18 top founder-led companies.
Upgrade Your Decision Making: Choose your Lam Research Narrative
Earlier it was mentioned that there is an even better way to think about valuation, and on Simply Wall St that shows up as Narratives. You pick a story for Lam Research, link it to explicit assumptions for future revenue, earnings and margins, and let the platform convert that story into a Fair Value that you can compare with the current price to decide if the stock looks attractive or stretched.
A Narrative is simply your view of how Lam Research’s business could play out, tied directly to a forecast and valuation rather than just a feeling about the stock. The Community page on Simply Wall St hosts many of these user and analyst Narratives so you can see how different assumptions stack up side by side.
Because Narratives recalculate when fresh information arrives, such as earnings, new orders or regulatory news, your Fair Value and risk reward picture adapt automatically. Whether you lean closer to a bullish view that lines up with a US$325.00 fair value or a more cautious stance that anchors around US$115.00, you can quickly see which story fits your own expectations before making any buy or sell decisions.
For Lam Research, however, we'll make it really easy for you with previews of two leading Lam Research Narratives:
On Simply Wall St you can see the full Bull and Bear Narratives side by side, stress test the assumptions against your own view, and then decide whether the current price lines up with the risk and reward you are comfortable taking.
🐂 Lam Research Bull Case
Fair value in this bullish narrative: US$309.52 per share.
Implied discount or premium to that fair value at US$286.41: around 7.5% below the narrative fair value.
Revenue growth assumption: 19.05% a year.
Views AI related chip demand, new fabs backed by government incentives, and Lam's process tools as supportive of higher revenue, margins and a broader customer base. Builds in rising profitability, with analysts expecting revenue of US$36.6b and earnings of US$12.3b by 2029, alongside a future P/E of 39.6x and ongoing share buybacks. Flags meaningful risks around China exposure, capital spending cycles, competition and R&D intensity, yet still concludes that a fair value of US$309.52 is reasonable if those growth and margin assumptions hold.
🐻 Lam Research Bear Case
Fair value in this bearish narrative: US$115.00 per share.
Implied discount or premium to that fair value at US$286.41: around 149% above the narrative fair value.
Revenue growth assumption: 7.58% a year.
Emphasizes export controls, high China exposure, rising local competition and tighter sustainability rules as constraints on revenue growth and pricing power. Builds a slower growth path with revenue of US$21.4b and earnings of US$5.7b by 2028, coupled with lower profit margins and a future P/E of 28.35x. Argues that, on these assumptions, a fair value of US$115.00 is appropriate and that recent enthusiasm around AI and memory spending could leave expectations ahead of what the business delivers.
If you want to see how other investors are weighing these kinds of trade offs for Lam Research, you can review the full set of narratives alongside your own thesis and track how they change as new results and news come through. See what the community is saying about Lam Research
Do you think there's more to the story for Lam Research? Head over to our Community to see what others are saying!NasdaqGS:LRCX 1-Year Stock Price Chart
This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.
Companies discussed in this article include LRCX.
Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team@simplywallst.com
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- The Nasdaq's top winners are now running hotter than in 2000: Chart of the Day
May 9, 2026
The top dot-com stocks were making history in 1999 and 2000. Today's Nasdaq winners are crushing even those gains.
The top 10 performers in the Nasdaq 100 (NDX) over the past year are up an average of 784%, according to BTIG’s Jonathan Krinsky, topping the 622% average gain for the index’s biggest winners in the year leading into its March 2000 peak.
There are many differences between the two eras. But this does show that the most explosive corner of the market has already moved into dot-com-scale territory — and the cast list makes the comparison feel a little eerie.
In the year before the Nasdaq’s March 2000 peak, the index’s top performers included Strategy (MSTR), Qualcomm (QCOM), Sandisk (SNDK), Analog Devices (ADI), Lam Research (LRCX), Regeneron (REGN), Nvidia (NVDA), Cognizant (CTSH), Apple (AAPL), and Adobe (ADBE).Nasdaq 100 hottest stocks: 2000 vs. 2026·BTIG, Bloomberg, Yahoo Finance
Today’s leaderboard is different, but not exactly new.
Sandisk (SNDK) is now at the top, followed by Western Digital (WDC), Seagate (STX), Micron (MU), Intel (INTC), Lam Research, AMD (AMD), Warner Bros. Discovery (WBD), Marvell Technology (MRVL), and Applied Materials (AMAT).
Some of the echoes are direct. Sandisk and Lam Research appear on both lists, linking the dot-com runup to today’s AI-infrastructure boom.
Others are more like historical rhymes. Nvidia, Apple, and Adobe were dot-com-era winners and remain major tech players today, even though they are not in the current top 10. Applied Materials also appeared separately among the Nasdaq 100’s top performers in 1999 and just missed the 2000-window table shown here.
Strategy may be the strangest rhyme of all. It topped the 2000-window list as MicroStrategy, then one of the Nasdaq’s hottest software stocks. Today, the Michael Saylor-led company is a very different kind of market vehicle, driven mostly by its massive bitcoin exposure.
The sore thumb in the modern list is Warner Bros. Discovery. The rest of the group mostly fits the AI-infrastructure trade. WBD is a media M&A story, with its rally fueled by a takeover fight between Netflix (NFLX) and Paramount Skydance (PSKY), which ultimately struck a deal for the company.
The old boom was built around the web, networking, chips, storage, and the promise of a new digital economy. The current boom is built around AI infrastructure, memory, data centers, storage, bitcoin, and the physical limits of compute.
That makes the rhyme more interesting than a simple bubble call. The speculative energy is familiar, but the bottlenecks have changed. Investors are chasing the pieces of the market that look scarce in the next build-out.
Story Continues
The aggregate numbers add one important wrinkle. Today’s top 10 have a higher average return than the 2000 comparison, but a lower median return: 354% today versus 455% then.Nasdaq 100 hottest stocks: 2000 vs. 2026·BTIG, Bloomberg, Yahoo Finance
In other words, the current Nasdaq list is hotter at the top, but more top-heavy underneath. Sandisk’s nearly 4,000% surge is doing a lot of work.
And that’s one of the takeaways for investors: The AI build-out can be real, and the biggest winners can still be priced for a lot of perfection.
Jared Blikre is the global markets and data editor for Yahoo Finance. Follow him on X at @SPYJared or email him at jaredblikre@yahooinc.com.
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- Why Analysts Are Growing More Confident In Lam Research (LRCX)
May 8, 2026
With an upside potential of 21.56%, Lam Research Corporation (NASDAQ:LRCX) is among the 10 Tech Stocks That Could Make You a Millionaire.
On April 23, B. Riley raised its price target on Lam Research Corporation (NASDAQ:LRCX) to $350 from $330 while maintaining a Buy rating on the shares. The firm cited strong earnings performance, supported by solid revenue, margin expansion, and effective spending execution, alongside broad-based end-market demand.
On April 23, Oppenheimer analyst Edward Yang also increased the firm’s price target on Lam Research Corporation (NASDAQ:LRCX) to $330 from $265 and maintained an Outperform rating. The firm highlighted better-than-expected results driven by the Customer Support Business Group and strong demand from China, as well as a robust outlook pointing to continued growth momentum.
Lam Research Corporation is an American semiconductor equipment manufacturer that provides wafer fabrication equipment and services to chipmakers worldwide. The company specializes in critical processes such as thin-film deposition, plasma etch, and wafer cleaning, which are essential for producing advanced semiconductor devices. Founded in 1980 and headquartered in Fremont, California, Lam Research plays a vital role in the global semiconductor supply chain.
Lam Research Corporation (NASDAQ:LRCX) appears well-positioned for continued growth as strong earnings performance and improving outlooks underscore its leverage to semiconductor industry expansion.
While we acknowledge the potential of LRCX as an investment, we believe certain AI stocks offer greater upside potential and carry less downside risk. If you're looking for an extremely undervalued AI stock that also stands to benefit significantly from Trump-era tariffs and the onshoring trend, see our free report on the best short-term AI stock.
READ NEXT: 8 Best Energy Infrastructure Stocks That Will Skyrocket and 7 Best Vertical Farming and Hydroponic Stocks to Invest in.
Disclosure: None. Follow Insider Monkey on Google News.
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- Jim Cramer Notes NVIDIA’s Status as Largest Company While Praising New Tech Chips
May 8, 2026
NVIDIA Corporation (NASDAQ:NVDA) was one of the stocks on Jim Cramer’s radar as he highlighted AI winners to buy for 2026. Cramer noted that the company provides chips that are necessary for data centers and said:
You need the chips, too. That means NVIDIA, of course, which started it all, remains the largest company on earth. But there’s also competitor, AMD. Again, fantastic job tonight. Lisa Su will be on tomorrow morning on Squawk on the Street. There’s memory and data storage with the now familiar Sandisk, you know the one that was up 4000% in a year, as well as Seagate, Western Digital, and Micron. For semiconductor manufacturing, what do we have? We have ASML, we got Applied Materials, Lam Research, and KLA. We got chips from Google and Amazon that are first-rate.
Photo by Javier Esteban on Unsplash
NVIDIA Corporation (NASDAQ:NVDA) develops accelerated computing and AI platforms, GPUs for gaming and professional use, cloud services, robotics and embedded systems, and automotive technologies. Cramer expressed a bullish sentiment toward the stock during the April 27 episode, as he commented:
One thing’s certain, though, seemingly out of nowhere, we’re seeing a tremendous level of interest in NVIDIA, which doesn’t even report this week. It’s enough to make you write off all the stories we’ve heard about how Amazon and Google have their own competing chips that will eat NVIDIA alive. Although I have to tell you, I think their competing chips are terrific. I saw this NVIDIA explosion start on Friday when the stock finished up more than eight bucks. I noticed there had been multiple sellers… and once they were cleaned out, this thing went up like a rocket ship. There was no stock supply, none. There were no sellers.
It happened again today. Lots of buyers, no sellers… So the buyers took the… stock all the way up to $216, up $8. What an incredible move for the biggest stock in this market. Now, NVIDIA’s been a late bloomer here in part because so many big accounts already owned it, but I guess enough firms didn’t that it could still have such a rapid jaunt. You know me, I say NVIDIA, don’t trade it, own it… I fully expect NVIDIA will be at the heart of all, of everything that comes in, and the long knives that have been out for it for so long, they’re gone.
While we acknowledge the potential of NVDA as an investment, we believe certain AI stocks offer greater upside potential and carry less downside risk. If you're looking for an extremely undervalued AI stock that also stands to benefit significantly from Trump-era tariffs and the onshoring trend, see our free report on the best short-term AI stock.
Story Continues
READ NEXT: 33 Stocks That Should Double in 3 Years and 15 Stocks That Will Make You Rich in 10 Years
Disclosure: None. Follow Insider Monkey on Google News.
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- Lam Research (LRCX) Is Up 19.5% After AI-Fab Orders Beat Expectations Has The Bull Case Changed?
May 7, 2026
In recent weeks, Lam Research reported stronger-than-expected quarterly results, highlighting rising orders from global foundry expansions and AI-focused chip production capacity. At the same time, Lam has been highlighted as a key potential equipment supplier to large new U.S. fabs like Elon Musk’s Terafab Initiative, underlining how AI infrastructure build-outs could further expand its opportunity set. We’ll now examine how this AI-driven surge in wafer fab equipment demand could reshape Lam Research’s investment narrative and risk balance.
Capitalize on the AI infrastructure supercycle with our selection of the 38 best 'picks and shovels' of the AI gold rush converting record-breaking demand into massive cash flow.
Lam Research Investment Narrative Recap
To own Lam Research, you need to believe that AI-driven demand for advanced chips will support healthy wafer fab equipment spending and reward Lam’s etch and deposition strengths. The latest earnings beat and strong AI-related orders reinforce that near term catalyst, while the biggest risk remains any pullback in capex from a few major customers or policy shocks that curb China demand. The Musk Terafab headlines are attention grabbing but not yet material to this core risk reward balance.
In that context, the most relevant update is Lam’s recent quarter, where higher foundry and HBM related demand supported revenue of about US$5.8 billion and solid margins. That tangible order strength matters more to the near term story than early Terafab speculation, because it ties directly to today’s AI server and memory build out and how long current WFE spending can stay elevated before the next cyclical pause.
Yet beneath the excitement, investors should be aware that Lam’s heavy reliance on a few mega fabs and China related sales could...
Read the full narrative on Lam Research (it's free!)
Lam Research's narrative projects $36.6 billion revenue and $12.3 billion earnings by 2029.
Uncover how Lam Research's forecasts yield a $309.52 fair value, a 4% upside to its current price.
Exploring Other PerspectivesLRCX 1-Year Stock Price Chart
Some of the most optimistic analysts were already assuming Lam could reach about US$41.6 billion of revenue and US$15.4 billion of earnings, so if you believe AI capex and onshoring will keep accelerating, their view can look more appealing than the consensus that worries more about export controls and customer concentration.
Explore 9 other fair value estimates on Lam Research - why the stock might be worth less than half the current price!
Form Your Own Verdict
Disagree with existing narratives? Extraordinary investment returns rarely come from following the herd, so go with your instincts.
Story Continues
A great starting point for your Lam Research research is our analysis highlighting 2 key rewards and 1 important warning sign that could impact your investment decision. Our free Lam Research research report provides a comprehensive fundamental analysis summarized in a single visual - the Snowflake - making it easy to evaluate Lam Research's overall financial health at a glance.
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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.
Companies discussed in this article include LRCX.
Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team@simplywallst.com
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- BofA Remains Bullish on Applied Materials (AMAT)
May 7, 2026
Applied Materials, Inc. (NASDAQ:AMAT) is one of the best strong buy stocks to invest in according to billionaires. BofA lifted the price target on Applied Materials, Inc. (NASDAQ:AMAT) to $465 from $420 on April 28, reaffirming a Buy rating on the shares. The firm told investors that it raised several price targets across semiconductor capital equipment following “strong” Lam Research results, and cited higher industry forecasts that should precede broad-based upward estimate revisions.Seaport Research Calls Applied Materials (AMAT) Best Positioned Among Wafer Equipment Suppliers
Applied Materials, Inc. (NASDAQ:AMAT) also received a rating update from B. Riley on April 13. The firm lifted the price target on the stock to $485 from $450, and maintained a Buy rating on the shares. It updated its multi-year AI capex and semiconductor capital wafer fab equipment views, and reported that it is more positive on calendar year 2026-2028 semi cap prospects. Susquehanna also raised the price target on Applied Materials, Inc. (NASDAQ:AMAT) to $500 from $435 on April 9, maintaining a Positive rating on the shares.
Applied Materials, Inc. (NASDAQ:AMAT) is a leader in materials engineering solutions engaged in the provision of manufacturing equipment, services, and software to the semiconductor, display, and related industries.
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- KLA’s AI Capacity Constraints Highlight Earnings Power And Buyback Commitment
May 6, 2026
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KLA (NasdaqGS:KLAC) is highlighted as a key supplier as AI driven semiconductor demand strains global equipment capacity. The company, alongside peers such as ASML and Lam Research, is reported to be running at or near full capacity as chipmakers scale advanced AI manufacturing. Industry wide bottlenecks in critical inspection and process control tools raise questions about how quickly new AI focused fabs can be equipped.
KLA sits at the center of this buildout, supplying inspection and metrology tools that are essential for producing cutting edge chips used in AI workloads. The stock last closed at $1,732.90, with a 1 year return of 157% and a 5 year return that is more than 5x, which underscores how closely investors are linking NasdaqGS:KLAC to the AI infrastructure theme. Recent moves, including a 14.2% gain over the past 30 days and a 36.0% return year to date, reflect that connection.
For investors, KLA's role as a gatekeeper for advanced manufacturing capacity is central to the broader AI story, and it also brings attention to supply constraints that could affect equipment lead times and project schedules. The current situation raises practical questions about how chipmakers prioritize tool allocations, how long capacity remains tight, and what that might mean for companies tied to AI demand along the semiconductor supply chain.
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KLA’s latest quarter and buyback activity give you a clearer read on how investors and management are reacting to AI driven demand and tight equipment supply. Revenue of US$3,415.08m and net income of US$1,200.99m for the March 2026 quarter, together with guidance that points to Q4 revenue around US$3.575b at the midpoint, show that KLA is converting the current AI capacity buildout into higher sales and earnings. At the same time, the company repurchased 439,596 shares for US$625.5m in the March quarter and has now bought back 19,298,833 shares, or 13.73% of its stock, under the June 2022 program. For investors, that combination of reported earnings, forward guidance and large scale buybacks signals confidence from both the market and management in KLA’s position as a key supplier alongside ASML and Lam Research as AI driven orders coincide with tight global tool capacity.
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How This Fits Into The KLA Narrative
The reported changes in revenue and earnings, plus Q4 guidance, align with the narrative that AI, high performance compute and advanced packaging are lifting demand for KLA’s process control tools. Regional revenue swings, including weaker contributions from China and Taiwan, underline the narrative’s focus on tariff and export control risk, which could challenge assumptions about how smooth that growth path is. The ongoing share repurchases and capacity tightness across equipment suppliers are not fully reflected in the narrative, which focuses more on long term demand drivers than on capital allocation choices and near term supply constraints.
Knowing what a company is worth starts with understanding its story. Check out one of the top narratives in the Simply Wall St Community for KLA to help decide what it's worth to you.
The Risks and Rewards Investors Should Consider
⚠️ Heavy exposure to leading edge foundry and memory spending means any pullback in wafer fab equipment budgets could affect orders for KLA’s tools. ⚠️ Mixed regional trends, especially softer China and Taiwan revenue, highlight ongoing geopolitical and tariff risks that could limit future demand in key markets. 🎁 Revenue and earnings growth for both the quarter and year to date, supported by high margin process control and services, point to a business that is currently exposed to AI driven complexity. 🎁 Large scale buybacks, with 13.73% of shares repurchased under the current program, indicate that management is returning significant cash to shareholders while the AI capacity cycle remains a central focus.
What To Watch Going Forward
From here, investors can monitor whether KLA can continue to secure tool allocations and maintain high utilization as AI focused fabs ramp, and how quickly capacity across peers such as Applied Materials, ASML and Lam Research adjusts. The next few quarters of regional revenue mix will also matter, particularly any further shifts in China and Taiwan exposure, as well as updates on new buyback authorizations or changes to capital return plans.
To stay informed on how the latest news affects the investment narrative for KLA, head to the community page for KLA to keep up with the top community narratives.
This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.
Companies discussed in this article include KLAC.
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