The AI chip craze should bring big business to Lam Research (LRCX).
The chip supplier, whose customers include Intel (INTC), Samsung and Taiwan Semiconductor (TSMC), forecasts 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,” Doug Bettinger, chief financial officer of Lam Research, told me at Bank of America’s global technology conference Tuesday evening. “The opportunity that this industry has and the opportunity that Lam has in particular is incredible,” Bettinger added.
This week, analysts at Bank of America raised their price target on the stock to $1,100 while maintaining a 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 that valuation is justified in part due to AI leading to record levels of wafer manufacturing equipment (WFE) intensity.
The company’s recently approved 10-for-1 stock split, along with a new $10 billion stock buyback, reignited investor enthusiasm last month.
However, Lam remains underperforming compared to his rivals. The stock is up 18% this year, compared to a 31% rise for Applied Materials (AMAT) and a 26% rise for ASML Holding (ASML).
