Why Lam Research Outpaced Market With 40% Gain In 2025

Zinger Key PointsLam Research stock surged 40% YTD, fueled by AI chip demand and a strong Q3 earnings beat with $4.72B in revenue.Trump’s chip bill and EV credit phaseout may boost chip investment, supporting Lam’s advanced chip equipment sales.Up Next: Get 5 Dark Horse Stocks Wall Street Is Quietly Loading Up OnSemiconductormanufacturing equipment giantLam ResearchLRCXhas seen its stock surge a remarkable 40% year-to-date, significantly outperforming the Nasdaq 100 index’s nearly 9% gain.This ascent is largely propelled by the rapidly expanding artificial intelligence (AI) and data center boom, which is driving unprecedented demand for advanced chips and, consequently, the sophisticated equipment required to produce them.Lam Research’s pivotal role in manufacturing advanced chips for AI workloads and high-bandwidth memory (HBM) places it at the forefront of this technological revolution.Also Read:Applied Materials, Lam Research, KLA Drop Amid Fresh Trade War Fears, Revenue RiskThe company’s strong performance is further strengthened by strategic investments and an expanding global footprint. However, this growth narrative is partially tempered by ongoing concerns surrounding the Trump administration’s tariff policies, broader geopolitical tensions, and macroeconomic uncertainties.Despite these headwinds, Lam Research is currently trading above its 50-day moving average of $86.81, having gained 50% in the last three months, easily surpassing the Nasdaq 100’s over 24% rise during the same period.The company’s financial results underscore this momentum. On April 23, Lam Research stock climbed nearly 5% after reportingthird-quarter revenueof $4.72 billion, a 24.41% year-over-year increase that beat analyst consensus estimates of $4.59 billion.The adjusted gross margin for the quarter stood at 49%. Looking ahead, Lam Research anticipates fourth-quarter revenue to range between $4.7 billion and $5.3 billion, well above the $4.45 billion estimate, signaling continued confidence in its near-term outlook.Macroeconomic TailwindsLam Research is strategically positioned to capitalize on recent policy shifts aimed at strengthening the U.S. chip industry.President Donald Trump’s“Big Beautiful Bill,” for instance, proposes an increase in the semiconductor investment tax credit from 25% to 30% through 2026.This incentive is expected to encourage chipmakers to expand domestic production, directly driving greater demand for Lam’s essential manufacturing equipment. Additionally, the bill ends the $7,500 EV tax credit after September 30, which may impact demand/pricing in the short run.Analysts Weigh InIndustry experts are increasingly bullish on Lam Research. In May, CNBC’sJim Cramerpublicly recommended Lam Research over key competitorsASML HoldingASMLandApplied MaterialsAMAT.This sentiment was echoed on June 9 byBank of America Securitiesanalyst Vivek Arya, who highlighted Lam Research’simproving outlookat a recent tech conference.Arya noted that Lam, alongside Applied Materials andKLA Corp.KLAC, is experiencing strong momentum in leading-edge foundry/logic (F/L) and advanced DRAM wafer fab equipment (WFE).This robust demand is helping to offset softness in the Chinese market and trailing-edge spending, with Arya projecting mid-single-digit year-over-year growth for 2025.Arya emphasized Lam’s early-stage NAND upgrades across several customers, identifying this as a significant $40 billion multi-year opportunity.He also underscored the company’s strong positioning in the crucial DDR5/HBM markets. Based on this optimistic outlook, Arya raised his price target on Lam Research to $100 from $90.In comparison, Arya also increased his price target for KLA Corp to $900 from $825, citing strong 2nm/GAA investment trends, expansion into advanced packaging markets, and KLA’s top-tier profitability.Interestingly, all three vendors view China as “de-risked” for 2025 despite ongoing geopolitical tensions, expecting the region to contribute 25%–30% of their overall sales.While Lam Research’s year-to-date performance is strong, its peers have also seen significant gains: ASML is up 16%, Applied Materials 22%, and KLA Corp over 47%.Price Action:LRCX stock is trading lower by 0.02% to $101.04 at last check Friday.Read Next:These Semiconductor Stocks To Face Least Tariffs Impact Compared To IntelLoading...Loading...LRCXLam Research Corp$101.160.10%Stock Score Locked: Want to See it?Benzinga Rankings give you vital metrics on any stock – anytime.Reveal Full ScoreEdge RankingsMomentum61.53Growth49.86Quality78.76Value22.25Price TrendShortMediumLongOverviewAMATApplied Materials Inc$197.48-0.28%ASMLASML Holding NV$800.41-0.21%KLACKLA Corp$925.31-0.36%Market News and Data brought to you by Benzinga APIs© 2025 Benzinga.com. . .Posted In:NewsTop StoriesMoversTechwhy it's moving