The AI chip craze is expected to bring big business to Lam Research (LRCX).
The chip supplier, whose customers include Intel (INTC), Samsung and Taiwan Semiconductor Corporation (TSMC), expects its high-bandwidth memory business to triple this year, and expects “stronger” demand in 2025.
“Frankly, I see continued strength for the foreseeable future,” Lam Research CFO Doug Bettinger told me inside Bank of America's Global Technology Conference late Tuesday. “The opportunity for this industry and the opportunity for Lam specifically is amazing,” Pettinger added.
Bank of America analysts this week raised their price target on the stock to $1,100 while maintaining a buy rating.
Analyst Vivek Arya (who also spoke in an upbeat tone on Nvidia on Yahoo Finance Live yesterday) noted that while chip equipment makers are currently trading at a premium to historical levels, he and his team believe the valuation is justified in part due to artificial intelligence leading to record highs. of wafer fabrication equipment (WFE) density.
The company's recently approved 10-for-1 stock split, along with a new $10 billion stock buyback, reignited investor excitement last month.
However, Lam's performance is still poor compared to her competitors. The stock is up 18% this year, versus Applied Materials ( AMAT )'s 31% rise and ASML Holding's ( ASML ) 26% rise.