- 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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- Stocks Supported by Strong Earnings and AI Optimism
May 11, 2026
The S&P 500 Index ($SPX) (SPY) today is up +0.25%, the Dow Jones Industrial Average ($DOWI) (DIA) is up +0.05%, and the Nasdaq 100 Index ($IUXX) (QQQ) is up +0.17%. June E-mini S&P futures (ESM26) are up +0.29%, and June E-mini Nasdaq futures (NQM26) are up +0.19%.
Stock indexes are moving higher today, with the S&P 500 and Nasdaq 10 posting new all-time highs amid strong corporate earnings results and resurgent optimism around artificial intelligence. Gains in stocks are limited today amid rising oil prices and bond yields after the US and Iran failed to reach terms to end the war in the Middle East. Global bond yields rose on concern that the continued standoff will keep energy prices elevated and could force the world’s central banks to tighten monetary policy. The 10-year T-note yield is up +3 bp to 4.39%. Join 200K+ Subscribers: Find out why the midday Barchart Brief newsletter is a must-read for thousands daily.
In the latest developments in the Middle East, President Trump and Iran rejected each other's latest peace proposals to end the 10-week conflict. Iran offered to transfer some of its stockpile of highly enriched uranium to a third country, but rejected the idea of dismantling its nuclear facilities. Iran also demanded a lifting of the US naval blockade and sanctions relief, while maintaining a degree of control over traffic through the Strait of Hormuz. Despite the ceasefire in place since last month, a drone strike over the weekend set a cargo vessel ablaze off Qatar in the Persian Gulf. Also, the United Arab Emirates and Kuwait both said they intercepted hostile drones.
Today’s US economic news was slightly weaker than expected after Apr existing home sales rose +0.2% m/m to 4.02 million, below expectations of 4.05 million.
Chinese trade news was better than expected, a positive factor for global growth. China Apr exports rose +14.1% y/y, stronger than expectations of +8.4% y/y. Apr imports rose +25.3% y/y, stronger than expectations of 20.0% y/y.
WTI crude oil prices (CLM26) are up by more than 2% today, as optimism that the US and Iran would reopen the Strait of Hormuz was dashed after President Trump on Sunday said that Iran's latest peace proposals were "totally unacceptable." The strait remains essentially closed, as about a fifth of the world’s oil and liquefied natural gas transits through the strait. Goldman Sachs estimates that the current disruption has drawn down nearly 500 million bbl from global crude stockpiles, with the drawdown potentially reaching 1 billion bbl by June.
The markets are discounting a 5% chance of a -25 bp FOMC rate cut at the next FOMC meeting on June 16-17.
Earnings reports thus far in this reporting season have been supportive of stocks. As of today, 83% of the 446 S&P 500 companies that reported Q1 earnings have beaten estimates. Q1 S&P 500 earnings are projected to climb +12% y/y, according to Bloomberg Intelligence. Stripping out the technology sector, Q1 earnings are projected to increase around +3%, the weakest in two years.
Overseas stock markets are mixed today. The Euro Stoxx 50 is down -0.55%. China's Shanghai Composite rallied to a 10-year high and closed up +1.08%. Japan's Nikkei Stock Average fell from a record high and closed down -0.47%.
Interest Rates
June 10-year T-notes (ZNM6) today are down -7 ticks. The 10-year T-note yield is up +3.8 bp to 4.392%. T-notes are under pressure today from a +2% jump in WTI crude oil prices, which is boosting inflation expectations. Also, supply pressures are weighing on T-notes as the Treasury will auction $125 billion of T-notes and T-bonds in this week’s quarterly refunding, beginning with today’s $58 billion auction of 3-year T-notes.
European government bond yields are moving higher today. The 10-year German Bund yield is up +3.7 bp to 3.042%. The 10-year UK gilt yield is up +9.1 bp to 5.003%.
ECB Governing Council member Martin Kocher said, "If the situation around energy prices does not improve significantly, an interest rate hike will be unavoidable in the near future."
Swaps are discounting an 85% chance of a +25 bp ECB rate hike at its next policy meeting on June 11.
US Stock Movers
Chipmakers and AI-infrastructure stocks are climbing today amid continued optimism over AI infrastructure build-outs. Qualcomm (QCOM) is up more than +8% to lead gainers in the Nasdaq 100, and Western Digital (WDC) is up by more than +6%. Also, Micron Technology (MU) and Seagate Technology Holdings Plc (STX) are up more than +5%, and Nvidia (NVDA) is up more than +3% to lead gainers in the Dow Jones Industrials. In addition, Applied Materials (AMAT) is up more than +2%, and Intel (INTC), KLA Corp (KLAC), Texas Instruments (TXN), and Lam Research (LRCX) are up more than +1%.
Mining stocks are moving higher today with rallies in gold, silver, and copper prices. Barrick Mining (B) and Hecla Mining (HL) are up more than +7%, and Coeur Mining (CDE) is up more than +4%. Also, Freeport McMoRan (FCX) and Newmont Corp (NEM) are up more than +3%, and Anglogold Ashanti (AU) is up more than +2%.
Airline stocks and cruise line operators are under pressure today amid a +2% increase in WTI crude oil prices, which boost fuel costs and undermine the companies' profitability prospects. Alaska Air Group (ALK), Carnival (CCL), and Royal Caribbean Cruises Ltd (RCL) are down more than -4%, and American Airlines Group (AAL) and Norwegian Cruise Line Holdings (NCLH) are down more than -3%. Also, United Airlines Holdings (UAL), Southwest Airlines (LUV), and Delta Air Lines (DAL) are down more than -2%.
Beazer Homes USA Inc (BZH) is up more than +30% on a report that said Dream Finders Homes is close to announcing a $704 million offer to acquire the company.
Babcock & Wilcox (BW) is up more than +22% after reporting Q1 revenue grew 44% year-over-year, and that Q1 Ebitda nearly quadrupled.
Lumentum Holdings (LITE) is up more than +17% to lead gainers in the S&P 500 after Nasdaq announced that the stock will replace CoStar Group in the Nasdaq 100 before the market opens on Monday, May 18.
Coherent Corp (COHR) is up more than +13% on news that CEO Anderson will travel with President Trump to China this week.
Monday.com (MNDY) is up more than +6% after reporting Q1 adjusted EPS of $1.15, better than the consensus of 93 cents, and raising its full-year revenue forecast to $1.466 billion to $1.474 billion from a previous forecast of $1.45 billion to $1.46 billion, better than the consensus of $1.46 billion.
Moderna (MRNA) is up more than +5% after announcing it’s researching vaccines to protect against hantaviruses.
Trade Desk (TTD) is down more than -7% to lead losers in the S&P 500 after HSBC downgraded the stock to reduce from hold with a price target of $20.
Iren Ltd (IREN) is down more than -6% after announcing that it intends to offer $2 billion of convertible senior notes due 2033 in a private offering.
Wendy’s (WEN) is down more than -6% after JPMorgan Chase downgraded the stock to underweight from neutral with a price target of $6.
Dell Technologies (DELL) is down more than -5% after UBS downgraded the stock to neutral from buy.
Tyler Technologies (TYL) is down more than -4% after announcing that it intends to offer $1 billion of convertible senior notes due 2031 in a private offering.
Mosaic (MOS) is down more than -3% after forecasting Q2 phosphate sales of 1.4 million to 1.7 million tons, weaker than the consensus of 1.78 million tons.
Earnings Reports(5/11/2026)
AECOM (ACM), Amentum Holdings Inc (AMTM), AST SpaceMobile Inc (ASTS), Certara Inc (CERT), Circle Internet Group Inc (CRCL), Constellation Energy Corp (CEG), Figure Technology Solutions Inc (FIGR), Fox Corp (FOXA), Halozyme Therapeutics Inc (HALO), Mosaic Co/The (MOS), Ovintiv Inc (OVV), Simon Property Group Inc (SPG), STERIS PLC (STE), ZoomInfo Technologies Inc (GTM). On the date of publication, Rich Asplund did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. For more information please view the Barchart Disclosure Policy here.
More news from Barchart
Stocks Set for Muted Open as Oil Rises After Trump Rejects Iran’s Response to Peace Proposal, U.S. Inflation Data AwaitedCPI, Trump-Xi Meeting and Other Can't Miss Items this WeekS&P Futures Climb With All Eyes on Key U.S. Jobs ReportStocks Steady Before the Open as Investors Await U.S.-Iran Updates; Earnings and Economic Data on Tap
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
- Strong Earnings and AI Optimism Push the S&P 500 and Nasdaq 100 to Record Highs
May 11, 2026
The S&P 500 Index ($SPX) (SPY) today is up +0.17%, the Dow Jones Industrial Average ($DOWI) (DIA) is up +0.10%, and the Nasdaq 100 Index ($IUXX) (QQQ) is up +0.06%. June E-mini S&P futures (ESM26) are up +0.19%, and June E-mini Nasdaq futures (NQM26) are up +0.05%.
Stock indexes are moving higher today, with the S&P 500 and Nasdaq 10 posting new all-time highs amid strong corporate earnings results and resurgent optimism around artificial intelligence. Gains in stocks are limited today amid rising oil prices and bond yields after the US and Iran failed to reach terms to end the war in the Middle East. Global bond yields rose on concern that the continued standoff will keep energy prices elevated and could force the world’s central banks to tighten monetary policy. The 10-year T-note yield is up +3 bp to 4.39%. Join 200K+ Subscribers: Find out why the midday Barchart Brief newsletter is a must-read for thousands daily.
In the latest developments in the Middle East, President Trump and Iran rejected each other's latest peace proposals to end the 10-week conflict. Iran offered to transfer some of its stockpile of highly enriched uranium to a third country but rejected the idea of dismantling its nuclear facilities. Iran also demanded a lifting of the US naval blockade and sanctions relief, while maintaining a degree of control over traffic through the Strait of Hormuz. Despite the ceasefire in place since last month, a drone strike over the weekend set a cargo vessel ablaze off Qatar in the Persian Gulf. Also, the United Arab Emirates and Kuwait both said they intercepted hostile drones.
Chinese trade news was better than expected, a positive factor for global growth. China Apr exports rose +14.1% y/y, stronger than expectations of +8.4% y/y. Apr imports rose +25.3% y/y, stronger than expectations of 20.0% y/y.
WTI crude oil prices (CLM26) are up by more than 2% today, as optimism that the US and Iran would reopen the Strait of Hormuz was dashed after President Trump said Iran's latest peace proposals were "totally unacceptable." The strait remains essentially closed, as about a fifth of the world’s oil and liquefied natural gas transits through the strait. Goldman Sachs estimates that the current disruption has drawn down nearly 500 million bbl from global crude stockpiles, with the drawdown potentially reaching 1 billion bbl by June.
The markets are discounting a 5% chance of a -25 bp FOMC rate cut at the next FOMC meeting on June 16-17.
Earnings reports thus far in this reporting season have been supportive of stocks. As of today, 83% of the 446 S&P 500 companies that reported Q1 earnings have beaten estimates. Q1 S&P 500 earnings are projected to climb +12% y/y, according to Bloomberg Intelligence. Stripping out the technology sector, Q1 earnings are projected to increase around +3%, the weakest in two years.
Overseas stock markets are mixed today. The Euro Stoxx 50 is down -0.28%. China's Shanghai Composite rallied to a 10-year high and closed up +1.08%. Japan's Nikkei Stock Average fell from a record high and closed down -0.47%.
Interest Rates
June 10-year T-notes (ZNM6) today are down -5 ticks. The 10-year T-note yield is up +2.7 bp to 4.381%. T-notes are under pressure today from a +2% jump in WTI crude oil prices, which is boosting inflation expectations. Also, supply pressures are weighing on T-notes as the Treasury will auction $125 billion of T-notes and T-bonds in this week’s quarterly refunding, beginning with today’s $58 billion auction of 3-year T-notes.
European government bond yields are moving higher today. The 10-year German Bund yield is up +2.5 bp to 3.030%. The 10-year UK gilt yield is up +7.4 bp to 4.986%.
ECB Governing Council member Martin Kocher said, "If the situation around energy prices does not improve significantly, an interest rate hike will be unavoidable in the near future."
Swaps are discounting an 84% chance of a +25 bp ECB rate hike at its next policy meeting on June 11.
US Stock Movers
Chipmakers and AI-infrastructure stocks are climbing today amid continued optimism over AI infrastructure build-outs. Qualcomm (QCOM) is up more than +6% to lead gainers in the Nasdaq 100, and Micron Technology (MU) is up more than +5%. Also, Western Digital (WDC) is up by more than +4%, and Intel (INTC) and Seagate Technology Holdings Plc (STX) are up more than +3%. In addition, Texas Instruments (TXN) is up by more than +2%, and Nvidia (NVDA), Applied Materials (AMAT), and Lam Research (LRCX) are up more than +1%.
Mining stocks are moving higher today with rallies in gold, silver, and copper prices. Barrick Mining (B) is up more than +8%, and Coeur Mining (CDE) and Hecla Mining (HL) are up more than +7%. Also, Freeport McMoRan (FCX) is up more than +4%, and Anglogold Ashanti (AU), Southern Copper (SCCO), and Newmont Corp (NEM) are up more than +3%.
Airline stocks and cruise line operators are under pressure today from a +2% increase in WTI crude oil prices, which boosts fuel costs and undercuts the companies' profitability prospects. Carnival (CCL) and Royal Caribbean Cruises Ltd (RCL) are down more than -4%, and Alaska Air Group (ALK) is down more than -3%. Also, American Airlines Group (AAL) and Norwegian Cruise Line Holdings (NCLH) are down more than -2%. In addition, United Airlines Holdings (UAL), Southwest Airlines (LUV), and Delta Air Lines (DAL) are down more than -1%.
Beazer Homes USA Inc (BZH) is up more than +29% on a report that said Dream Finders Homes is close to announcing a $704 million offer to acquire the company.
Babcock & Wilcox (BW) is up more than +18% after reporting Q1 revenue grew 44% year-over-year, and that Q1 Ebitda nearly quadrupled.
Monday.com (MNDY) is up more than +11% after reporting Q1 adjusted EP of $1.15, better than the consensus of 93 cents, and raising its full-year revenue forecast to $1.466 billion to $1.474 billion from a previous forecast of $1.45 billion to $1.46 billion, better than the consensus of $1.46 billion.
Moderna (MRNA) is up more than +7% after announcing it’s researching vaccines to protect against hantaviruses.
Lumentum Holdings (LITE) is up more than +6% after Nasdaq announced that the stock will replace CoStar Group in the Nasdaq 100 before the market opens on Monday, May 18.
Trade Desk (TTD) is down more than -9% to lead losers in the S&P 500 after HSBC downgraded the stock to reduce from hold with a price target of $20.
Iren Ltd (IREN) is down more than -7% after announcing that it intends to offer $2 billion of convertible senior notes due 2033 in a private offering.
Dell Technologies (DELL) is down more than -5% after UBS downgraded the stock to neutral from buy.
Wendy’s (WEN) is down more than -3% after JPMorgan Chase downgraded the stock to underweight from neutral with a price target of $6.
Tyler Technologies (TYL) is down more than -3% after announcing that it intends to offer $1 billion of convertible senior notes due 2031 in a private offering.
Mosaic (MOS) is down more than -2% after forecasting Q2 phosphate sales of 1.4 million to 1.7 million tons, weaker than the consensus of 1.78 million tons.
Earnings Reports(5/11/2026)
AECOM (ACM), Amentum Holdings Inc (AMTM), AST SpaceMobile Inc (ASTS), Certara Inc (CERT), Circle Internet Group Inc (CRCL), Constellation Energy Corp (CEG), Figure Technology Solutions Inc (FIGR), Fox Corp (FOXA), Halozyme Therapeutics Inc (HALO), Mosaic Co/The (MOS), Ovintiv Inc (OVV), Simon Property Group Inc (SPG), STERIS PLC (STE), ZoomInfo Technologies Inc (GTM).
On the date of publication, Rich Asplund did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. For more information please view the Barchart Disclosure Policy here.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
- AMAT to Post Q2 Earnings: Time to Buy, Sell or Hold the Stock?
May 11, 2026
Applied Materials AMAT is scheduled to report second-quarter fiscal 2026 results on May 14.
For the fiscal second quarter, AMAT expects revenues of $7.65 billion (+/- $500 million). The Zacks Consensus Estimate for revenues is pegged at $7.69 billion, suggesting an increase of 8.4% from the year-ago quarter’s reading.
Applied Materials projects non-GAAP earnings per share of $2.64 (+/- $0.20). The Zacks Consensus Estimate for earnings is pegged at $2.68 per share, indicating an increase of 12.1% from the year-ago quarter’s reported figure. The figure has been revised upward in the past seven days.Zacks Investment Research
Image Source: Zacks Investment Research
AMAT has an impressive earnings surprise history. AMAT beat the Zacks Consensus Estimate in each of the trailing four quarters, with an average earnings surprise of 5.24%.
Applied Materials, Inc. Price and EPS Surprise
Applied Materials, Inc. price-eps-surprise | Applied Materials, Inc. Quote
Earnings Whispers for AMAT Stock
Our proven model predicts an earnings beat for AMAT this earnings season. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the chances of an earnings beat, which is the case here.
Earnings ESP: Earnings ESP, which represents the difference between the Most Accurate Estimate ($2.77 per share) and the Zacks Consensus Estimate ($2.68 per share), is +3.00%. You can uncover the best stocks to buy or sell before they are reported with our Earnings ESP Filter.
Zacks Rank: AMAT carries a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank stocks here.
Factors to Note for AMAT
Applied Materials’ second quarter of fiscal 2026 results are expected to benefit from the rapid expansion of AI infrastructure and the increasing complexity of semiconductor manufacturing. Traction in high-margin product lines like leading-edge logic, high-bandwidth memory (HBM) DRAM and advanced packaging is likely to support AMAT’s results in the to-be-reported quarter.
Continued traction in AMAT’s wafer equipment manufacturing products is likely to have helped its semiconductor systems business grow rapidly in the to-be-reported quarter. Applied Materials is also gaining traction in its complex chip stacking architectures, boosting demand for deposition, conductor etch and eBeam technologies. This is likely to have persisted in the to-be-reported quarter.
Applied Materials has also been experiencing strong momentum from gate-all-around transistor adoption and advanced packaging for the past few quarters. This traction is likely to have persisted in the to-be-reported quarter. AMAT’s Applied Global Services business is expected to have benefited from rising fab utilization, increasing software and diagnostics intensity, and recurring service revenues.
Story Continues
AMAT’s flash memory or NAND sales nearly doubled to $1.41 billion in fiscal 2025. Although AMAT has a lower market share in the NAND space, it is gaining prominence. The growth trend is likely to have persisted in the to-be-reported quarter, supporting AMAT’s top-line growth. Furthermore, AMAT’s innovative businesses, comprising Epi, PVD, Implant, CMP and RTP, boast high market share and unique capabilities, which are also an added advantage.
Applied Materials’ Price Performance & Valuation
Applied Materials shares have gained 69.4% year to date, outperforming the Zacks Electronics – Semiconductors industry’s growth of 41.5%.
AMAT YTD Performance ChartZacks Investment Research
Image Source: Zacks Investment Research
Let us now look at the value Applied Materials offers to its investors at current levels. AMAT is currently trading at a premium with a forward 12-month price-to-sales (P/S) of 9.89X compared with the industry’s 9.50X.
AMAT Forward 12-Month (P/S) Valuation ChartZacks Investment Research
Image Source: Zacks Investment Research
Investment Thesis for AMAT Stock
Applied Materials competes with KLA Corporation KLAC, Lam Research LRCX and Camtek CAMT in the WFE and testing market. Applied Materials and KLA Corporation offer similar solutions, such as Wafer Inspection, Yield Enhancement and Process Control inspection systems, while Camtek stands at the forefront of semiconductor inspection and metrology solutions.
Camtek is focused on high-performance computing modules, advanced packaging and silicon carbide technologies. Lam Research develops Atomic Layer Deposition tools like AT200M, AT410 and AT650P that are similar to the devices made by Applied Materials. While Camtek, Lam Research and KLA Corporation overlap with Applied Materials, AMAT’s broad product portfolio enables it to seamlessly integrate its equipment across multiple processes.
Applied Materials’ integration of equipment across multiple processes reduces reliance on any single technology cycle and enables it to price its product stack better to protect margins. Moreover, AMAT’s DRAM offerings are gaining traction as customers are aggressively investing in 6F² nodes supported by rising demand for high bandwidth memory DRAM, driven by AI workloads.
On its first-quarter 2026 earnings call, AMAT highlighted its record growth in both Logic and DRAM segments, driven by major semiconductor transitions. Applied Materials expects future generations of HBM to adopt hybrid bonding, and in the hybrid bonding space, AMAT is one of the leading innovators. AMAT’s advanced packaging, particularly 3D chiplet stacking, is another structural tailwind as AI chips become more heterogeneous.
Conclusion: Buy AMAT Stock Now
Applied Materials is likely to benefit from traction across wafer equipment manufacturing and advanced packaging products. New product introductions like Epi, PVD, Implant, CMP and RTP will add to the long-term value of the company. Given these factors, AMAT is worth investing in right now.
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This article originally published on Zacks Investment Research (zacks.com).
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- Can this massive rally in AI chip stocks continue? Bernstein answers
May 11, 2026
Investing.com -- The Philadelphia Semiconductor Index has surged 66% in just five months and 162% year-on-year, dwarfing returns in the S&P 500 and Nasdaq, but Bernstein analyst Stacy Rasgon believes the rally has further to run, because it has been driven almost entirely by earnings growth rather than multiple expansion.
"While SOX blended NTM earnings estimates are up ~69% since the start of the year, the SOX P/FE multiple is actually down slightly (~2%)," Rasgon wrote, adding that "earnings growth has accounted for more than 100% of the sector move YTD."
The sector currently trades at approximately 28 times forward earnings, which is elevated, but well below peak levels.
Rasgon stated that "the controversy should probably be on earnings sustainability rather than valuations."
Within the sector, Rasgon flagged a growing divergence that he sees as an opportunity. GPU and ASIC names, alongside semiconductor capital equipment stocks, have seen relatively muted multiple expansion despite strong earnings growth, suggesting room for catch-up.
By contrast, analog and CPU names have seen more aggressive multiple re-rating relative to their earnings increases.
Memory stocks have been the most extreme, with average share prices more than tripling year-to-date on an earnings outlook that has nearly quintupled, even as multiples have declined on peak cycle concerns.
Bernstein remains bullish on Nvidia, Broadcom, and semiconductor capital equipment names, noting that Nvidia and Broadcom "both screen cheap" at roughly mid-teens forward earnings on realistic 2027 estimates.
The firm recently warmed to AMD, seeing a path to $20 in earnings per share by 2028, and rates Applied Materials, KLA, and Lam Research Outperform as well.
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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.
Disclosure: None. Follow Insider Monkey on Google News.
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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
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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
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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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