We just covered Here is How Billionaire Philippe Laffont’s Top 10 Picks Crushed The Market. Lam Research Corporation (NASDAQ:LRCX) ranks #10 (see the Here is How Billionaire Philippe Laffont’s Top 5 Picks Crushed The Market).
YTD Stock Performance: +35%
Philippe Laffont’s Stake: $1.67 Billion
Lam Research Corporation (NASDAQ:LRCX) has been one of the biggest winners in the portfolio during the AI boom because it’s a key pick-and-shovel name. The company makes wafer fabrication equipment, mainly etch and deposition systems, which are essential steps in building advanced chips. These tools are used repeatedly in the production of AI chips, including GPUs, high-bandwidth memory (HBM), and advanced logic semiconductors. The company’s equipment is critical as AI data center demand accelerates, chip designs are becoming more complex, especially with the shift toward 3D architectures and smaller process nodes.
Only a few global players compete at the highest level in etch and deposition technology, which means a strong moat for Lam Research Corporation (NASDAQ:LRCX). Once a chipmaker qualifies Lam’s tools for its production process, switching costs are extremely high due to the sensitivity of advanced manufacturing.
Lam Research (NASDAQ:LRCX) customers include major semiconductor manufacturers such as TSMC, Samsung, Intel, Micron, SK hynix, and SMIC, along with other global foundries and memory chip producers. These companies use Lam’s equipment to build advanced logic chips and memory products, especially for AI data centers.
LRCX is up about 35% so far this year, while NVDA has gained 6% in the same period.
Parnassus Mid Cap Fund stated the following regarding Lam Research Corporation (NASDAQ:LRCX) in its fourth quarter 2025 investor letter:
“Lam Research Corporation (NASDAQ:LRCX), a designer and maker of semiconductor processing equipment, continues to see strong demand for its industry-leading process tools and equipment to support semiconductor manufacturing driven by the AI megatrend (Click Here to Read the Letter in Detail).”
While we acknowledge the risk and potential of LRCX as an investment, our conviction lies in the belief that some 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 and that has 10,000% upside potential, check out our report about this cheapest AI stock.
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