What Happened?
Shares of semiconductor equipment maker Lam Research (NASDAQ: LRCX) jumped 2.8% in the morning session after Citigroup raised its price target on the stock.
The investment bank increased its target to $120 from $113 while maintaining a "Buy" rating on the shares, signaling confidence in the company's outlook. This positive analyst action comes as reports highlight Lam Research's strong financial position. The semiconductor equipment manufacturer boasts a net cash position of $1.91 billion, providing significant financial flexibility.
Furthermore, the company has demonstrated exceptional performance with 12.9% annual revenue growth over the last five years and an excellent operating margin of 30.5%, showcasing an efficient business model. This financial soundness and strong operational results also make it an attractive option for dividend-focused investors.
After the initial pop the shares cooled down to $105.19, up 2.2% from previous close.
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What Is The Market Telling Us
Lam Research’s shares are quite volatile and have had 19 moves greater than 5% over the last year. In that context, today’s move indicates the market considers this news meaningful but not something that would fundamentally change its perception of the business.
The previous big move we wrote about was 6 days ago when the stock dropped 4.5% on the news that Morgan Stanley downgraded the stock to 'Underweight' from 'Equal-Weight', citing concerns over a future slowdown in growth.
The investment bank also lowered its price target on the shares to $92 from $94. Morgan Stanley's pessimism stems from expectations that Lam Research's key growth drivers in China and the NAND memory markets will slow significantly after a strong performance in 2024 and 2025. The firm projects that the company's system shipment growth will decelerate dramatically, from an estimated 82% in 2025 to just 3% in 2026. This analyst action added to broader negativity across the semiconductor sector, which experienced a wider selloff, further pressuring Lam Research's stock.
Lam Research is up 45.2% since the beginning of the year, and at $105.19 per share, it is trading close to its 52-week high of $107.38 from August 2025. Investors who bought $1,000 worth of Lam Research’s shares 5 years ago would now be looking at an investment worth $3,475.
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