Lam Research (LRCX) Moves 4.0% Higher: Will This Strength Last?

Lam Research LRCX shares soared 4% in the last trading session to close at $389.04. The move was backed by solid volume with far more shares changing hands than in a normal session. This compares to the stock's 28.1% gain over the past four weeks.

The optimism surrounding the stock can be attributed to Lam Research benefiting from rising AI-driven semiconductor investments across memory, foundry and logic markets. LRCX is seeing strong demand for its deposition and etch equipment used in advanced AI chips, high-bandwidth memory, NAND and advanced packaging applications, which are supporting investor confidence in the company’s long-term growth outlook.

This semiconductor equipment maker is expected to post quarterly earnings of $1.65 per share in its upcoming report, which represents a year-over-year change of +24.1%. Revenues are expected to be $6.65 billion, up 28.7% from the year-ago quarter.

Earnings and revenue growth expectations certainly give a good sense of the potential strength in a stock, but empirical research shows that trends in earnings estimate revisions are strongly correlated with near-term stock price movements.

For Lam Research, the consensus EPS estimate for the quarter has been revised marginally higher over the last 30 days to the current level. And a positive trend in earnings estimate revision usually translates into price appreciation. So, make sure to keep an eye on LRCX going forward to see if this recent jump can turn into more strength down the road.

The stock currently carries a Zacks Rank #2 (Buy). You can see the complete list of today's Zacks Rank #1 (Strong Buy) stocks here >>>>

Lam Research belongs to the Zacks Electronics - Semiconductors industry. Another stock from the same industry, GlobalFoundries Inc. GFS, closed the last trading session 6.4% higher at $85.83. Over the past month, GFS has returned 13.9%.

GlobalFoundries' consensus EPS estimate for the upcoming report has remained unchanged over the past month at $0.44. Compared to the company's year-ago EPS, this represents a change of +4.8%. GlobalFoundries currently boasts a Zacks Rank of #3 (Hold).

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