#5 - Lam Research (NASDAQ:LRCX)
If you’re looking for a different way to play the chip shortage, consider an investment in Lam Research (NASDAQ:LRCX). The company is an integral part of the semiconductor supply chain. Specifically, it makes the equipment that makes semiconductor wafers.
In the 5G rollout, semiconductor stocks moved higher before end-user stocks like Verizon (NYSE:VZ). The same principle is at work here. The company should benefit as semiconductor companies look to ramp up global production. However, Lam is a U.S.-based company that should benefit from what looks like an inevitable shift to onshore fabrication. This would mean it’s very likely that the company will see its revenue from the United States grow from the 4% level it reached in 2020.
The company is leading the industry in a manufacturing process known as dry etch that involves precisely removing material with high-tech equipment.
In the company’s most recent earnings report, it delivered 34% year-over-year revenue growth and 50% Non-GAAP EPS growth. The company also has strong profitability metrics compared to its peers. LRCX stock is up 21% two months into 2021.
About Lam Research
Lam Research Corporation designs, manufactures, markets, refurbishes, and services semiconductor processing equipment used in the fabrication of integrated circuits. The company offers ALTUS systems to deposit conformal films for tungsten metallization applications; SABRE electrochemical deposition products for copper interconnect transition that offers copper damascene manufacturing; SOLA ultraviolet thermal processing products for film treatments; and VECTOR plasma-enhanced CVD ALD products.
Read More - Current Price
- $72.64
- Consensus Rating
- Moderate Buy
- Ratings Breakdown
- 13 Buy Ratings, 6 Hold Ratings, 0 Sell Ratings.
- Consensus Price Target
- $97.97 (34.9% Upside)
