Jim Cramer Calls Lam Research (LRCX) ‘Remarkable’ Amid ‘Monster’ Quarter

Jim Cramer in a recent program on CNBC praised Lam Research Corporation (NASDAQ:LRCX) and the company’s management.

“Lam Research is probably the greatest semiconductor capital equipment company other than Taiwan Semi, and they reported a monster quarter. And Tim Archer, the CEO, came on Mad Money—he’s fantastic. This was an amazing quarter. I know it’s up three, it’s going to go up more. They are just a remarkable company.”

Sands Capital Select Growth Fund stated the following regarding Lam Research Corporation (NASDAQ:LRCX) in its Q4 2024 investor letter:

“We exited Lam Research Corporation (NASDAQ:LRCX) on valuation concerns. The stock’s 12-month forward earnings multiple more than doubled from its 2022 low to the end of 2024’s third quarter. This valuation reflected lofty expectations for artificial intelligence (AI)-driven dynamic random access memory (DRAM) demand and NAND flash memory capital expenditure. While both DRAM and NAND stand to benefit from AI use cases, we believe this is likely to be overwhelmed by a muted recovery in consumer categories and potential deterioration in Chinese semiconductor capital expenditure. The latter concern became more acute following ASML Holding’s third-quarter 2024 earnings results, in which the business guided for its China revenue to fall by nearly 50 percent in 2025.

Looking past the valuation concerns, we maintain conviction in Lam’s long-term earnings power, given its leadership position in etch and deposition wafer fabrication equipment and the longer-term demand and technology trends. DRAM and NAND growth can inflect with improvements and scaling in AI (e.g., more memory use in inferencing, new packaging technology to improve input and output between memory and logic chips), and etch and deposition will become more important with new gate-all-around transistor architecture. We also expect the business to be a primary beneficiary of the next PC and smartphone replacement cycle, though we have little visibility into the cycle’s timing.”

While we acknowledge the potential of LRCX as an investment, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns and have limited downside risk. If you are looking for an AI stock that is more promising than LRCX and that has 100x upside potential, check out our report about this cheapest AI stock.

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Disclosure: None. This article is originally published at Insider Monkey.