We recently published a list of Louis Navellier’s 10 New Stock Picks. In this article, we are going to take a look at where Lam Research Corporation (NASDAQ:LRCX) stands against other Louis Navellier’s new stock picks.
Navellier & Associates is an independent money management firm founded in 1987 by renowned growth analyst Louis Navellier. Based in Reno, Nevada, the firm has more than thirty years of experience serving both individual and institutional clients through a disciplined, style-consistent investment approach. The firm’s mission is to maximize returns while managing excessive risk, offering customized portfolio strategies that incorporate a proprietary blend of quantitative and fundamental analysis. Navellier’s investment philosophy centers around identifying and exploiting inefficiencies in the market to uncover high-potential growth stocks. Unlike market indexes and firms that mimic market indexes, Navellier & Associates focuses on outperforming them, resulting in portfolios with low correlation to benchmarks, increased diversification, and reduced risk.
At the heart of Navellier’s investment process is a rigorous three-step, bottom-up stock selection methodology. The first step involves applying a proprietary quantitative screening process to evaluate market and individual stock statistics, specifically measuring reward through alpha and risk through standard deviation. This process narrows the investment options to stocks that rank in the upper percentiles for their risk/reward metrics. In the second step, fundamental analysis is used to identify stocks with exceptional profit margins, robust earnings growth, and forward-looking, reasonable price-to-earnings ratios. Finally, a proprietary optimization model allocates stocks within the portfolio to maximize alpha while minimizing volatility, ensuring that each portfolio is well-diversified across multiple sectors and industries. These strategies are particularly well-suited for long-term investors seeking steady returns in both bull and bear markets.
Louis Navellier himself brings over three decades of expertise to the firm. Since 1980, he has published quantitative research on growth stocks and remains a leading voice in the investment community. As the Founder, Chairman, Chief Investment Officer, and Chief Compliance Officer of Navellier & Associates, he continues to oversee the same portfolios he helped launch. His investment insights have earned him frequent appearances on CNBC, Fox Business News, and regular quotes in leading financial outlets such as Bloomberg and MarketWatch. He has been featured in major publications like Forbes, Fortune, Barron’s, and The Wall Street Journal, and profiled in books such as Secrets of the Investment All-Stars and Investing Under Fire. Today, the firm manages over $1 billion in private and institutional accounts and remains a sought-after resource for high-net-worth individuals and institutions alike.
Navellier & Associates offers tailored portfolio reviews, designed to help clients make sound financial decisions aligned with their preferences, individual goals, and risk tolerance. These reviews include a comprehensive portfolio analysis, risk assessment, and personalized investment recommendations. Portfolios managed by Navellier range from $100,000 to over $100 million, and all recommendations are made on a person-by-person basis. This level of customization underscores the firm’s belief that every investor is unique and deserves a strategy that reflects their personal financial objectives.
In addition to its financial expertise, the Navellier team is composed of passionate professionals who share common interests and life goals with their clients. From hiking and skiing to golfing and parenting, the firm’s staff brings a personal touch to its services, fostering genuine connections with investors. Navellier & Associates is deeply committed to providing not only top-tier financial management but also exceptional client service, innovative investment tools, and cutting-edge market research. With a homegrown foundation and a global outlook, Navellier continues to help clients achieve long-term financial security through disciplined, adaptive, and data-driven investment strategies.
As of its most recent 13F filing for the fourth quarter of 2024, Navellier & Associates reported managing approximately $834 million in securities. The firm’s top ten holdings account for 29.42% of this portfolio, reflecting its concentrated yet carefully optimized investment strategy grounded in systematic analysis and decades of market experience.
Our Methodology
We searched through Navellier & Associates’ Q4 2024 13F filings to identify the new stock picks that the firm invested in during the fourth quarter of the year. From the resultant data, we ranked the equities based on the hedge fund’s stake value in each holding. Additionally, we have mentioned the hedge fund sentiment around each stock using data from 1,009 hedge funds tracked by Insider Monkey in the fourth quarter of 2024.
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 373.4% since May 2014, beating its benchmark by 218 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 as of Q4: 84
Navellier & Associates’ Equity Stake: $2.50 Million
Lam Research Corporation (NASDAQ:LRCX) is a prominent American supplier of wafer-fabrication equipment and related services for the semiconductor industry. The company specializes in front-end wafer processing, which involves the creation of the active components of semiconductor devices and their intricate wiring. Lam Research plays a critical role in the production of next-generation chips used across computing, communication, automotive, and consumer electronics markets due to its advanced technologies and services.
On January 29, 2025, Lam Research Corporation (NASDAQ:LRCX) released its financial results for the December 2024 quarter. The company reported revenue of $4.38 billion, a gross margin of $2.07 billion, operating expenses of $739 million, and operating income equivalent to 30.5% of revenue. The net income for the quarter was $1.19 billion, translating to $0.92 per diluted share. These results marked an improvement over the September 2024 quarter, during which Lam posted revenue of $4.17 billion, a gross margin of $2 billion, operating expenses of $738 million, operating income at 30.3% of revenue, and net income of $1.12 billion, or $0.86 per diluted share.
For the quarter ending in December 2024, Lam Research Corporation (NASDAQ:LRCX) reported a decrease in cash, cash equivalents, and restricted cash, which totaled $5.7 billion compared to $6.1 billion at the close of the September 2024 quarter. This decline was primarily attributed to cash used for capital return initiatives and capital expenditures, partially offset by cash flows from operating activities during the period.
Looking ahead, Lam Research Corporation (NASDAQ:LRCX) provided guidance for the March 2025 quarter, projecting revenue of approximately $4.65 billion, with a potential range of plus or minus $300 million. Additionally, Lam declared a quarterly dividend of $0.23 per share for the December 2024 quarter, reflecting its ongoing commitment to returning value to shareholders while continuing to invest in strategic growth initiatives.
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.”
Overall, LRCX ranks 9th on our list of Louis Navellier’s new stock picks. While we acknowledge the potential of LRCX, our conviction lies in the belief that AI stocks hold greater promise for delivering higher returns, and doing so within a shorter time frame. There is an AI stock that went up since the beginning of 2025, while popular AI stocks lost around 25%. 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 this cheapest AI stock.
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Disclosure: None. This article is originally published at Insider Monkey.