Lam Research Corporation has experienced a notable decline in its stock price, dropping approximately 37% from its 52-week high of $438.50 to around $275. This decline follows a strong performance earlier in the year, and the company is viewed as a key player in the semiconductor supply chain, especially as demand for advanced chips surges due to increased AI spending.
In the most recent quarter, Lam reported record revenue of $6.72 billion, a 30% increase year-over-year, with significant growth in its NAND memory segment. Management projects September-quarter revenue to reach $8.1 billion and anticipates over 70% growth in its advanced chip packaging business by 2026.
The complexity of modern semiconductors is driving demand for Lam's specialized etching and deposition equipment, which is essential for manufacturing intricate chip designs. Additionally, Lam's services business, which has seen over 40% revenue growth year-over-year, provides a stable revenue stream that can help mitigate risks associated with potential slowdowns in AI spending.
Jeff Kilburg, founder and CEO of KKM Financial, views the current stock price as an attractive entry point, especially with upcoming earnings reports expected to reflect the company's strong fundamentals. While the stock may be volatile, Kilburg believes the long-term growth potential remains robust as the demand for sophisticated semiconductor manufacturing continues to rise