S&P 500   4,109.31
DOW   33,274.15
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Closing prices for crude oil, gold and other commodities
BREAKING: Tiny biotech successfully treats blindness (Ad)
MarketBeat Week in Review – 3/27 - 3/31
UK travelers face hours-long waits for ferries to France
BREAKING: Tiny biotech successfully treats blindness (Ad)
Intensity and insults rise as lawmakers debate debt ceiling
Credit Suisse takeover hits heart of Swiss banking, identity
BREAKING: Tiny biotech successfully treats blindness (Ad)
UN body mulls deep sea mining amid demand for minerals
Small areas reopen near Fukushima nuclear plant, few return
S&P 500   4,109.31
DOW   33,274.15
QQQ   320.93
Closing prices for crude oil, gold and other commodities
BREAKING: Tiny biotech successfully treats blindness (Ad)
MarketBeat Week in Review – 3/27 - 3/31
UK travelers face hours-long waits for ferries to France
BREAKING: Tiny biotech successfully treats blindness (Ad)
Intensity and insults rise as lawmakers debate debt ceiling
Credit Suisse takeover hits heart of Swiss banking, identity
BREAKING: Tiny biotech successfully treats blindness (Ad)
UN body mulls deep sea mining amid demand for minerals
Small areas reopen near Fukushima nuclear plant, few return
S&P 500   4,109.31
DOW   33,274.15
QQQ   320.93
Closing prices for crude oil, gold and other commodities
BREAKING: Tiny biotech successfully treats blindness (Ad)
MarketBeat Week in Review – 3/27 - 3/31
UK travelers face hours-long waits for ferries to France
BREAKING: Tiny biotech successfully treats blindness (Ad)
Intensity and insults rise as lawmakers debate debt ceiling
Credit Suisse takeover hits heart of Swiss banking, identity
BREAKING: Tiny biotech successfully treats blindness (Ad)
UN body mulls deep sea mining amid demand for minerals
Small areas reopen near Fukushima nuclear plant, few return
S&P 500   4,109.31
DOW   33,274.15
QQQ   320.93
Closing prices for crude oil, gold and other commodities
BREAKING: Tiny biotech successfully treats blindness (Ad)
MarketBeat Week in Review – 3/27 - 3/31
UK travelers face hours-long waits for ferries to France
BREAKING: Tiny biotech successfully treats blindness (Ad)
Intensity and insults rise as lawmakers debate debt ceiling
Credit Suisse takeover hits heart of Swiss banking, identity
BREAKING: Tiny biotech successfully treats blindness (Ad)
UN body mulls deep sea mining amid demand for minerals
Small areas reopen near Fukushima nuclear plant, few return

Can Chip Gear Maker Lam Continue Its Rally As Earnings Slow?

Key Points

  • The company expects a major decline in revenue due to the U.S. restricting chip-equipment exports to China.
  • Wall Street is eyeing tepid earnings growth in fiscal 2023, and a significant decline in fiscal 2024.
  • On the bullish side, Lam has a history of increasing its dividend yield since 2015.
  • Growth in applications, including AI, automotive and 5G, could also lead to increased revenue over time. 
  • 5 stocks we like better than Lam Research

Can Chip Gear Maker Lam Continue Its Rally As Earnings Slow?

Could a nascent rally in chip gear maker Lam Research Corporation (NASDAQ: LRCX) be the real deal, or is it a head fake for tech investors eager to see a long-awaited turnaround? 

Fremont, California-based Lam Research has significant sales to China, accounting for about 30% of total revenue. But in its most recent quarterly report in October, the company expects a major revenue decline due to the U.S. restricting chip-equipment exports to China. Lam CEO Tim Archer estimated that the ban would reduce sales by $2 billion to $2.5 billion this year.

Lam shares rallied nearly 2% last week in light holiday-season trading volume and advanced by the same amount in Wednesday’s session. Over the past three months, shares rallied 5.88% and have held above October’s structure low of $299.59. 

On a one-year basis, though, Lam stock is down 39.76%.

With a market capitalization of $57.61 billion, Lam is one of the larger companies within the chip-equipment industry. Only Netherlands-based ASML Holding N.V. (NASDAQ: ASML) and Santa Clara, California, headquartered Applied Materials, Inc. (NASDAQ: AMAT) are larger.  

Participating In Industry Uptrend

Within its industry group, Lam’s 12-month price performance lags both those stocks and fellow large-cap KLA Corporation (NASDAQ: KLAC), in addition to numerous small- and mid-caps. Enough stocks within the chip-gear-making arena have posted strong recent gains to lift the entire industry within the past three months. Lam has participated in that uptrend, albeit with smaller gains than some of its peers.


On a technical basis, Lam shares aren’t as healthy as KLA, which holds above its 50-day and 200-day averages. Lam is trading below both those lines, although in a potentially positive sign, its 50-day line has been trending higher and may be on a trajectory to cross above the 200-day average in the coming sessions. 

Lam and fellow chip-industry stocks are slowly rebounding from a December 22 report from Micron Technology, Inc. (NASDAQ: MU) indicating that semiconductor demand had weakened. Lam gapped down 8.55% on the news, while Nvidia Corporation (NASDAQ: NVDA) fell 7%, Advanced Micro Devices, Inc.  (NASDAQ: AMD) dropped 5.64%, and Qualcomm, Inc. (NASDAQ: QCOM) was down 3.41%. 

Lam shares have advanced 2.6% since their December 22 close.

The case for Lam has both bullish and bearish elements. On the bull side, the company has been steadily increasing its dividend since 2015. MarketBeat data show Lam’s current annual dividend per share to be $6.90, for a yield of 1.65%. While that’s not the kind of yield you’d find with asset classes such as master limited partnerships or real estate investment trusts, it’s still a way to offset stock price declines. 

The company's last quarterly report emphasized that global demand remains strong, except for China. In the earnings call, chief financial officer Doug Bettinger cited increased investment to support areas such as artificial intelligence, the Internet of things, cloud and automotive applications, and the rollout of 5G technologies. 

Potential For Higher Revenue

Those applications have the potential for an increased need for chips over time. In turn, that could lead to higher revenue for companies like Lam. 

Offsetting that good news is slower demand for phones and other personal computing devices. Coupled with the restrictions on sales to China, investors are likely to see a slowdown soon. 

Wall Street is eyeing tepid earnings growth of 4% this year. Lam is slated to report its fiscal second quarter for 2023 on January 25 after the close. Analysts expect the company to earn  $9.96 per share on revenue of $4.43 billion. For fiscal 2024, analysts expect Lam to earn $27.66 per share, a decrease of 20%.

MarketBeat earnings data show the company beat top and bottom-line views in the past two quarters. Earnings surprises can often boost the stock, so even with earnings declines priced in, there may be room to rally.

Should you invest $1,000 in Lam Research right now?

Before you consider Lam Research, you'll want to hear this.

MarketBeat keeps track of Wall Street's top-rated and best performing research analysts and the stocks they recommend to their clients on a daily basis. MarketBeat has identified the five stocks that top analysts are quietly whispering to their clients to buy now before the broader market catches on... and Lam Research wasn't on the list.

While Lam Research currently has a "Moderate Buy" rating among analysts, top-rated analysts believe these five stocks are better buys.

View The Five Stocks Here


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Companies Mentioned in This Article

CompanyMarketRank™Current PricePrice ChangeDividend YieldP/E RatioConsensus RatingConsensus Price Target
Lam Research (LRCX)
2.5663 of 5 stars
$530.12-0.2%1.30%14.25Moderate Buy$492.10
ASML (ASML)
2.0316 of 5 stars
$680.71+0.6%0.73%41.56Moderate Buy$688.92
Applied Materials (AMAT)
2.3086 of 5 stars
$122.83+0.6%0.85%16.47Moderate Buy$129.16
Micron Technology (MU)
2.4797 of 5 stars
$60.34-4.4%0.76%43.41Moderate Buy$68.39
NVIDIA (NVDA)
2.5095 of 5 stars
$277.77+1.4%0.06%159.64Moderate Buy$259.87
QUALCOMM (QCOM)
3.2502 of 5 stars
$127.58+0.1%2.35%12.29Moderate Buy$156.48
KLA (KLAC)
2.3614 of 5 stars
$399.17+0.8%1.30%16.41Hold$400.61
Advanced Micro Devices (AMD)
2.2749 of 5 stars
$98.01+0.1%N/A111.38Moderate Buy$95.10
Compare These Stocks  Add These Stocks to My Watchlist 

Kate Stalter

About Kate Stalter

Contributing Author: Retirement, Asset Allocation, and Tax Strategies

Kate Stalter is a Series 65-licensed asset manager, with more than two decades of experience in various areas of financial services. As an investment advisor and financial planner, Kate personally manages client portfolios, with a focus on successful retirement, including asset allocation, income generation and tax strategies. Kate also serves as a capital-markets contributor at Forbes.com, and is an expert columnist for the investment advisory channel at U.S. News & World Report.
Contact Kate Stalter via email at stalterkate@gmail.com.

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