On Thursday, Mizuho maintained its Outperform rating and a stock price target of $1,050.00 on shares of Lam Research (NASDAQ:LRCX). Following a discussion with the company's executives, the firm highlighted several positive indicators for the semiconductor equipment manufacturer. Lam Research is reportedly experiencing robust performance in High Aspect Ratio (HAR) etching, with its Low Temperature Etch technology delivering between 800 to 1,000 chambers.
The company also anticipates that spending on DRAM, particularly for High Bandwidth (NASDAQ:BAND) Memory (HBM), will continue to be weighted towards capacity expansion through 2025. Moreover, Lam Research is expected to benefit from various tailwinds in the Logic/Foundry segment, including Gate-All-Around (GAA) technology, Backside Power (BSP), Advanced Packaging (NYSE:PKG), and Extreme Ultraviolet (EUV) lithography.
Furthermore, the firm believes that Lam Research will continue to see strong investment in China, particularly in adding capacity at the lagging edge, which could extend into 2025 as China aims to ramp up its domestic production.
These factors, combined with the ongoing demand driven by artificial intelligence across all end markets, position Lam Research favorably for potential growth going into 2025. However, the firm also noted that restrictions on China pose a risk to the industry.
Mizuho's stance on Lam Research remains positive, with the expectation that the company will continue to benefit from the aforementioned industry tailwinds, setting the stage for a potentially stronger performance in the coming years. The price target of $1,050.00 reflects this optimistic outlook.
In other recent news, Lam Research Corporation (NASDAQ:LRCX) has seen several noteworthy developments. The company's revenue for the quarter ending June 30 was $3.87 billion, slightly above analyst expectations of $3.82 billion. This was primarily driven by a surge in demand for AI-powered chips. Lam Research announced a 15% increase in its quarterly dividend, escalating from $2.00 to $2.30 per share of common stock, as approved by the Board of Directors.
The company has also made strategic additions to its board of directors, appointing industry veterans Ita Brennan and Mark Fields. These appointments are expected to enhance the company's leadership with their extensive experience in financial management and business operations across various industries.
In terms of product advancements, Lam Research has released its latest cryogenic etch technology, Lam Cryo 3.0, designed to meet the growing demand for high-capacity and high-performance memory. Furthermore, the company announced a $10 billion share repurchase program and a 10-for-1 stock split, set to take effect after the market closes in October 2024.
In the analyst realm, TD Cowen has expressed confidence in Lam Research, raising its price target on the stock to $1,050 and maintaining a Buy rating. These recent developments reflect the company's commitment to strategic growth and investor returns.
InvestingPro Insights
As investors consider Mizuho's optimistic outlook on Lam Research (NASDAQ:LRCX), they may find additional context in the latest data and insights from InvestingPro. Lam Research, a prominent player in the Semiconductors & Semiconductor Equipment industry, is currently trading at a high Price / Book multiple of 11.66, with a P/E ratio of 26.02, reflecting a market that values its profitability and growth potential. Despite a recent decline in revenue growth of -14.48% over the last twelve months as of Q1 2023, the company has managed to maintain a strong gross profit margin of 47.61%, underscoring its operational efficiency.
InvestingPro Tips highlight that Lam Research has raised its dividend for 10 consecutive years, with a notable dividend growth of 33.33% over the last twelve months, signaling its commitment to shareholder returns. Moreover, the company has a solid track record of profitability, having been profitable over the last twelve months. For investors seeking further insights, there are over 12 additional InvestingPro Tips available, providing a deeper dive into Lam Research's financial health and market position.
As Lam Research navigates the semiconductor industry landscape, with its various tailwinds and potential risks, these InvestingPro metrics and tips offer valuable information for those looking to make informed investment decisions. The company's next earnings date is set for October 16, 2024, which will be a significant event for investors tracking its performance.
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