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 (TSMC), foresees its high bandwidth memory business tripling 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 inside Bank of America’s Global Technology Conference late Tuesday. “The opportunity in front of this industry and the opportunity in front of Lam specifically is amazing,” Bettinger added.
This week, Bank of America analysts 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 relative to historical levels, he and his team believe valuation is justified in part due to AI leading 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, re-iginited investor excitement last month.
However, Lam remains an under-performer compared to rivals. The stock is up 18% this year, versus Applied Materials (AMAT) 31% surge and ASML Holding’s (ASML) 26% climb.
