Is LRCX a good stock to buy? We came across a bullish thesis on Lam Research Corporation on Nikhs’s Substack. In this article, we will summarize the bulls’ thesis on LRCX. Lam Research Corporation’s share was trading at $258.57 as of May 4th. LRCX’s trailing and forward P/E were 48.53 and 33.22 respectively according to Yahoo Finance.
Lam Research Corporation designs, manufactures, markets, refurbishes, and services semiconductor processing equipment used in the fabrication of integrated circuits in the United States, China, Korea, Taiwan, Japan, Southeast Asia, and Europe. LRCX is increasingly re-rated as a structural compounder in semiconductor manufacturing, as 3QFY26 results show artificial intelligence is driving wafer fabrication equipment demand while increasing etch and deposition intensity for advanced NAND, DRAM, and packaging.
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The company reported $5.84 billion in revenue and $1.47 in non-GAAP EPS, with gross margins of 49.9% and guidance moving to 50.5%, reinforcing that profitability is becoming structurally elevated rather than cyclical. AI-driven architecture shifts, particularly the rise of high-density QLC NAND and 1c DRAM nodes, are expanding Lam’s content per wafer and accelerating a $40 billion NAND conversion cycle now expected to complete largely by 2027. This supports a rising served available market and positions Lam as the “infrastructure tax” on Moore’s Law at increasingly complex nodes.
The installed base, over 100,000 chambers, compounds through Customer Support run-rate exceeding $8 billion annually, adding durable high-margin revenue streams from spares, upgrades, and automation tools like Dextro. Margin expansion toward 50%+ is guided as structural, driven by tool maturity, lower service costs, and supply chain gains, implying ~$1.50 EPS upside and $45–50 per share impact.
At $223, the stock was framed as underappreciating this compounding mechanism, while at $275 it reflects improved visibility but not full normalization of the flywheel. In a bullish scenario, Lam could reach $320–380 as AI-driven content per wafer, NAND greenfield investment, and installed base monetization reinforce each other. Conservative assumptions imply sustained double-digit earnings growth, positioning Lam as a long-duration winner in semiconductor complexity rather than a cyclical equipment proxy.
Previously, we covered a bullish thesis on Lam Research Corporation (LRCX) by The Antifragile Investor in May 2025, highlighting its deep process moat, installed base strength, and service-driven margin flywheel. LRCX’s stock price has appreciated by approximately 212.32% since our coverage. Nikhs shares a similar view but emphasizes AI-driven content per wafer expansion and structural margin re-rating.
Lam Research Corporation is not on our list of the 40 Most Popular Stocks Among Hedge Funds. As per our database, 104 hedge fund portfolios held LRCX at the end of the fourth quarter which was 93 in the previous quarter. 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.
Disclosure: None.
