Lam Research (LRCX): Evaluating Valuation as OpenAI Memory Deals and VECTOR TEOS 3D Fuel Sector Momentum

Lam Research (LRCX) has caught the attention of investors lately amid surging interest in AI and memory chip production. The latest catalyst is OpenAI’s memory supply deals with Samsung and SK Hynix, which signals potential equipment demand upside for Lam.

See our latest analysis for Lam Research.

Lam Research’s momentum has steadily built over the past year as breakthroughs such as OpenAI’s sweeping memory deals and new VECTOR® TEOS 3D technology captured headlines, fueling demand optimism for chip equipment suppliers. While short-term share price moves have been modest, Lam’s one-year total shareholder return is up just under 1%. The company’s core technology relevance and steady gains over the last several years suggest that investors remain confident about its long-term role in powering the next wave of AI innovation.

If you’re keen to see which other tech and chip stocks are riding this innovation surge, now is a good time to explore the full See the full list for free..

But with shares reaching all-time highs and analysts divided, the real question is whether Lam Research is trading ahead of its fundamentals or if recent industry catalysts provide room for more upside from here.

Most Popular Narrative: 31.9% Overvalued

The most widely followed narrative places Lam Research’s fair value at $110.53, which is well below the last close at $145.81. This disparity hints at aggressive growth and margin assumptions behind the calculation, but also much debate among analysts on where the company is truly headed.

Lam’s leadership in new process technologies, such as ALD Moly for metal deposition and advanced packaging solutions (SABRE 3D systems), positions the company to capture an increasing share of spend on next-generation chip manufacturing. This could lead to market share gains, higher average selling prices, and expanding gross margins over the long term.

Read the complete narrative.

What’s fueling this bullish price target? A wave of ambitious growth projections, major margin bets, and a future profit multiple that could make or break the story. Wondering which pivotal earnings forecasts and margin assumptions stand between Lam and that “fair” value? Unlock the answers by reading the full narrative.

Result: Fair Value of $110.53 (OVERVALUED)

Have a read of the narrative in full and understand what's behind the forecasts.

However, heightened competition from Asian equipment makers and any slowdown in China's semiconductor demand could quickly weaken Lam's revenue outlook and dampen investor sentiment.

Find out about the key risks to this Lam Research narrative.

Build Your Own Lam Research Narrative

If you see the story differently or want to test your own assumptions against the numbers, you can craft your own perspective in just a few minutes with our tools. Do it your way.

A good starting point is our analysis highlighting 3 key rewards investors are optimistic about regarding Lam Research.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

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