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Lam Research (LRCX) caught investors’ attention after its recent earnings exceeded projections. Management also boosted its 2025 spending outlook for wafer fab equipment to $105 billion, citing stronger demand for AI-driven chip technologies.

See our latest analysis for Lam Research.

Lam Research’s impressive run is more than just a flash-in-the-pan rally. Following a notable office expansion in Oregon and a strong earnings beat, the company has seen its share price surge, with a 114% return year-to-date and a remarkable 119% total shareholder return over the past year. Momentum has accelerated recently as investors respond positively to Lam’s raised spending forecast for next year, even as export hurdles in China add some complexity to the outlook.

If Lam’s growth story has you looking for what’s next in tech, explore the sector’s innovation leaders through our See the full list for free..

With shares trading near recent highs and a fresh round of optimism driving expectations, the big question remains: Does Lam Research still offer value at today’s prices, or have markets already priced in all the future growth?

Lam Research’s last close of $155.14 is modestly below the most popular narrative’s fair value of $158.52, suggesting the stock may hold some room for upside. This consensus-based outlook combines moderate optimism with a close eye on sector dynamics and recent momentum.

Rapidly rising AI workloads and the associated need for higher storage, bandwidth, and processing power are accelerating the adoption of advanced chip architectures (such as gate-all-around, 3D NAND, and advanced packaging). This is increasing demand for Lam’s etch and deposition tools, supporting sustained revenue growth and robust order visibility.

Read the complete narrative.

Want to know what’s driving this valuation? The narrative is founded on bold projections for future growth in chip demand and the powerful impact of emerging technologies in Lam’s pipeline. Dive deeper to see what ambitious assumptions and fine-print details are pushing the stock’s fair value just above today’s price.

Result: Fair Value of $158.52 (UNDERVALUED)

Have a read of the narrative in full and understand what’s behind the forecasts.

However, ongoing geopolitical tensions in China or a slowdown in end-market chip demand could quickly challenge the bullish case for Lam’s future growth.

Find out about the key risks to this Lam Research narrative.

While the consensus fair value suggests Lam Research is slightly undervalued, a scan of its price-to-earnings ratio (33.5x) reveals it is below both the US Semiconductor industry average (35.6x) and its immediate peers (37.1x). This hints at potential value. However, is the margin significant enough to warrant a second look, or do valuation risks still linger?

See what the numbers say about this price — find out in our valuation breakdown.

Simply Wall St performs a discounted cash flow (DCF) on every stock in the world every day (check out Lam Research for example). We show the entire calculation in full. You can track the result in your watchlist or portfolio and be alerted when this changes, or use our stock screener to discover 927 undervalued stocks based on their cash flows. If you save a screener we even alert you when new companies match – so you never miss a potential opportunity.

If the analysis above does not reflect your outlook or you want to take a hands-on approach, you can craft your own narrative in just a few minutes using Do it your way.

A great starting point for your Lam Research research is our analysis highlighting 4 key rewards and 1 important warning sign that could impact your investment decision.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

Companies discussed in this article include LRCX.

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