Lam Research Stock Rose 18% Last Week. Here’s What Investors Need to Know

Key Stats for Lam Research Stock

• Past-Week Performance: 18.0%
• 52-week Range: $56 to $220
• Valuation Model Target Price: $235
• Implied Upside: 7.4% over 2.5 years

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What Happened?

Lam Research (LRCX) stock rose about 18.0% over the past week, moving to the upper end of its recent trading range as semiconductor equipment stocks led gains across the sector.

The rally followed renewed confidence in AI-related chip spending, particularly tied to advanced memory and leading-edge logic manufacturing.

Industry commentary over the week reinforced expectations that demand from data center and AI workloads remains firm, which directly benefits Lam due to its heavy exposure to etch tools used in increasingly complex chip designs.

Earlier in the week, Goldman Sachs reiterated a constructive view on semiconductor capital equipment, pointing to improving visibility around memory pricing and continued discipline in capacity additions.

Analysts highlighted that restrained supply behavior from major memory producers such as Samsung and SK hynix lowers the risk of another sharp memory downturn, supporting steadier demand for equipment suppliers like Lam.

As shares pushed higher later in the week, buying momentum accelerated as investors appeared more comfortable that Lam’s earnings can remain resilient even if overall wafer volumes grow modestly.

The strong close suggests the market is increasingly treating Lam as a structurally stronger business tied to AI-driven investment rather than a short-term cyclical bounce.

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Is Lam Research Undervalued?

Lam Research is trading at a valuation that assumes AI-driven semiconductor spending remains durable and that higher etch intensity translates into sustained earnings power. In the Guided Valuation Model above, the stock is valued using:

• Revenue Growth (CAGR): 12.7%
• Operating Margins: 34.4%
• Exit P/E Multiple: 31.3x

Based on these inputs, the model estimates a target price of $235, implying 7.4% total upside from the current share price and an annualized return of about 2.9% over the next 2.5 years.

Lam’s results over the next year are closely tied to whether memory makers meaningfully ramp high bandwidth memory capacity, since HBM production requires more etch steps and tighter process control than prior generations.

Advanced logic is another important driver, as more complex transistor architectures increase the number of process steps per wafer, directly lifting demand for Lam’s core tools.

At the same time, growth in Lam’s services business and a richer product mix tied to its expanding installed base help support margins and cash generation, even if new tool orders fluctuate quarter to quarter.

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