Lam Research Corporation (LRCX): A Bull Case Theory

We came across a bullish thesis on Lam Research Corporation on Value investing subreddit by SniperPearl. In this article, we will summarize the bulls’ thesis on LRCX. Lam Research Corporation’s share was trading at $100.42 as of September 4^th. LRCX’s trailing and forward P/E were 24.20 and 22.47 respectively according to Yahoo Finance.

Lam Research Corporation (LRCX) stands out as a dominant player in the semiconductor equipment space, particularly in etching and deposition technologies, with a market share of roughly 55% in etch and 24% in deposition. Founded in 1980 by David Lam, the company leveraged cutting-edge plasma etching technology to establish itself as the leader in advanced etch, where it holds over 90% market share in high-margin segments like HAR etch for 3D-NAND and selective etch at the atomic scale.

LRCX’s asset-light model, with CapEx typically below 6% of revenue, allows it to operate more efficiently than peers like Applied Materials (AMAT) and Tokyo Electron (TOELY), while outsourcing manufacturing further lowers fixed costs. The company’s complex etch segment, representing 40–45% of total etch revenue, is non-discretionary for customers and insulated from semiconductor cycle volatility, while its Customer Support Business Group adds 30–35% of high-margin recurring revenue. Despite cyclical industry risks and customer concentration, including over 30% of revenue from China, LRCX’s technology moat and high switching costs provide strong protection and runway for growth.

The market currently undervalues LRCX’s growth potential, pricing in only ~9% free cash flow growth over the next few years, whereas a reasonable forecast suggests 20% CAGR before moderating. With top-tier returns on invested capital exceeding 30% and superior efficiency among peers, LRCX trades at a multiple that is attractive relative to its capital productivity. As semiconductor demand grows, especially in advanced etch for next-generation logic and memory, LRCX is positioned to capture substantial high-margin revenue upside, making it a compelling investment with underappreciated growth and value drivers that could materially re-rate the stock.

Previously we covered a bullish thesis on Lam Research Corporation (LRCX) by The Antifragile Investor in May 2025, which highlighted its essential role in semiconductor manufacturing, high-margin services, and strong recurring revenue. The stock has appreciated approximately 21% since our coverage as the thesis played out. SniperPearl shares a similar view but emphasizes LRCX’s market share in advanced etch, asset-light model, and underappreciated free cash flow growth.

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Disclosure: None.