The AI chip craze is expected to bring major companies to Lam Research (LRCX).
The chip supplier, whose customers include Intel (INTC), Samsung and Taiwan Semiconductor (TSMC), expects its high-bandwidth memory business to triple this year, and expects “even stronger” demand in 2025.
“Frankly, I see continued strength for the foreseeable future,” Lam Research CFO Doug Bettinger told me Tuesday at Bank of America’s Global Technology Conference. “The opportunities this sector presents, and the opportunities specific to Lam, are tremendous,” Bettinger added.
This week, Bank of America analysts raised their price target on the stock to $1,100, while maintaining their buy rating.
Analyst Vivek Arya (who also struck a bullish 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 partially justified because AI leads to record levels of wafer fab equipment (WFE) intensity.
The company’s recently approved 10-for-1 stock split, along with a new $10 billion share buyback, sparked new excitement among investors last month.
However, Lam remains an underperformer compared to his rivals. The stock is up 18% this year, compared to a 31% rise in Applied Materials (AMAT) and a 26% rise in ASML Holding (ASML).
