We recently published a list of Jim Cramer Looked At These 7 Stocks Recently. In this article, we are going to take a look at where Lam Research Corporation (NASDAQ:LRCX) stands against other stocks that Jim Cramer recently looked at.
Jim Cramer, host of Mad Money, recently shared his perspective on a few oil service stocks and the impact of President Donald Trump’s pro-drilling agenda. While Trump has rolled out extensive plans aimed at boosting the oil and gas industry, Cramer said that oil service stocks might not see immediate gains as a result.
“The whole oil and gas industry loves a ‘drill, baby, drill’ White House, but doesn’t automatically take up the oil service stocks, or the producers for that matter. After listening to what SLB and HAL had to say over the past week, considering the macro environment and the new geopolitical factors, I think their stocks can work over time, just perhaps not necessarily right now.”
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Cramer further elaborated that President Trump’s public statements often feel like a non-stop “lightning round” of buys and sells. Wall Street, he said, enjoys the energy and excitement that comes with Trump’s rapid-fire ideas, even if they don’t always lead to actionable investment opportunities.
“If you’re a trader, Trump’s a dream come true. He generates a huge number of catalysts every time he talks. I don’t think most people should trade too hard unless you do it professionally, but this is heaven on earth for them.”
Cramer also pointed to historical examples, specifically drawing a comparison to President Ronald Reagan’s time in office. He recalled that Reagan’s vision of a 600-ship Navy led to significant profits for defense contractors. However, Cramer noted an important difference between Reagan’s and Trump’s approach: while Reagan’s statements were more measured, Trump’s style is fast-paced and unpredictable. Cramer sees this rapid-fire communication as both a challenge and an opportunity for market participants.
“I think we have to expect that President Trump will say something every day that gets a ton of coverage… We need to monitor these statements, but, look, we can’t expect all of them to generate actionable investing ideas, even if they do produce bullish animal spirits that boost the market.”
Our Methodology
For this article, we compiled a list of 7 stocks that were discussed by Jim Cramer during the recent episode of Mad Money on January 23. We listed the stocks in ascending order of their hedge fund sentiment as of the third quarter, which was taken from Insider Monkey’s database of 900 hedge funds.
Why are we interested in the stocks that hedge funds pile into? The reason is simple: our research has shown that we can outperform the market by imitating the top stock picks of the best hedge funds. Our quarterly newsletter’s strategy selects 14 small-cap and large-cap stocks every quarter and has returned 275% since May 2014, beating its benchmark by 150 percentage points (see more details here).
A technician operating an automated semiconductor processing machine with laser accuracy.
Lam Research Corporation (NASDAQ:LRCX)
Number of Hedge Fund Holders: 58
During the episode, Cramer expressed enthusiasm about Lam Research Corporation (NASDAQ:LRCX) and emphasized that the stock is cheap.
“That stock is so cheap. Oh, I wanna buy it. I wanna buy. We have so much semi in the Charitable Trust, but that stock is so, the cheapest I’ve seen in a long time. I really like LRCX.”
Lam Research (NASDAQ:LRCX) operates in the semiconductor sector and specializes in the design, manufacturing, marketing, refurbishment, and maintenance of equipment used in integrated circuit production. At the time of writing, the stock has a forward P/E of 21.60. In October 2024, Cramer pointed out that the company is not solely tied to ASML’s performance. He mentioned that the company has already disclosed its level of exposure to China and has made adjustments by reducing it. Given these factors, Cramer expressed that he would consider buying the stock.
Vltava Fund, an investment management company, noted in its Q4 2024 investor letter that Lam Research (NASDAQ:LRCX) is a market leader in plasma etching, thin film deposition platforms, photoresist systems, as well as wet and plasma-based cleaning products for individual wafers. The fund mentioned the company’s ROCE, capital allocation, and more as it said:
“In the quarter just ended, we added to the portfolio two new companies from the technology sector: Applied Materials and Lam Research Corporation (NASDAQ:LRCX). Both are in the same industry as is another of our investments that we have held for some time, KLA Corporation. This industry is termed semiconductor devices and materials. One chapter in Hidden Investment Treasures is devoted to investing in technology companies and, among other things, the controversy over what really constitutes a technology company. As investors, we try to view technology companies not according to the industry into which they are formally classified but by whether the technologies and technological processes used in the production of their products and services are an essential element in value creation or if they are a source of long-term, sustainable competitive advantage. Among the companies that are formally categorized as technology-based and fall into either the Information Technology or the Communications Services sector, we find some that can be said to be just that but also others for which this classification is at least debatable. Similarly, among companies that do not formally belong to these two sectors, we find many that clearly are built to a large extent on technology and base their market positions and competitiveness on it. In the cases of Applied Materials and Lam Research, there can be no doubt that these are technology companies not only as a formality but also in fact.
Dozens of companies are directly or indirectly involved in the production of semiconductors. Within this broad group of companies, there are several without which it would not be possible to produce advanced types of semiconductors in the world today. These include a group of five very well-known companies, each of which has a dominant global position in its particular field, and which together operate more or less as oligopolies. These are Lam Research, Applied Materials, KLA Corporation, ASML, and Tokyo Electron. At the end of the year, we benefited from a significant correction in the share prices of Applied Materials and Lam Research, and, together with KLA Corporation, we now own three of them. We view these as one collective investment into a critical point within a very important segment of the global economy that is growing and will continue to grow over the long term.
Lam Research manufactures wafer fabrication equipment for the semiconductor industry and also provides related services. The company is a market leader in plasma etching, thin film deposition platforms, photoresist systems, as well as wet and plasma-based cleaning products for individual wafers. Its main customers are the four major semiconductor manufacturers Micron, Samsung, SK Hynix, and Taiwan Semiconductors. Lam Research is a business with net margins of around 27% and ROCE of about 30%. Capital outlays are relatively small. The company has good capital allocation with a preponderance of share buybacks…” (Click here to read the full text)
Overall, LRCX ranks 3rd on our list of stocks that stocks that Jim Cramer recently looked at. While we acknowledge the potential of LRCX as an investment, our conviction lies in the belief that AI stocks hold greater promise for delivering higher returns and doing so within a shorter time frame. If you are looking for an AI stock that is more promising than LRCX but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
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Disclosure: None. This article is originally published at Insider Monkey.