Chip Gear Maker Lam Research Toys With Buy Point

Lam Research (LRCX) is the IBD Stock Of The Day as the semiconductor equipment supplier flirts with a buy point. LRCX stock rose on Wednesday.

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In afternoon trades on the stock market today, LRCX stock climbed 0.5% to close at 713.99. That’s close to a 726.52 buy point from a 16-week consolidation period, according to IBD MarketSmith charts.

LRCX stock has touched that buy point in two trading sessions in the past week but closed below it on both days. The stock hit an almost two-year high of 730.99 on Monday. Lam Research notched its record high of 731.85 back in January 2022.

In a positive sign, the relative strength line for Lam Research is near recent highs as it outperforms the S&P 500 index.

LRCX Stock Drops After Earnings Report

Last month, LRCX stock fell after Lam Research topped fiscal first-quarter estimates but disappointed with its longer-term outlook.

The Fremont, Calif.-based company earned an adjusted $6.85 a share on sales of $3.48 billion in the quarter ended Sept. 24. On a year-over-year basis, Lam Research earnings fell 34% as sales declined 31%. It was the company’s third straight quarter of declining sales and earnings.

On a conference call with analysts, Lam executives gave cautious commentary about their expectations for wafer fabrication equipment spending in 2024. They also noted that a recent sales surge to customers in China is likely to moderate next year.

In a note to clients, Barclays analyst Blayne Curtis said Lam’s sales gains in China masked its weakness in Taiwan and South Korea. Plus, the spending level in China is likely not sustainable, he said. Curtis rates Lam Research stock as equal weight, or neutral.

LRCX stock tumbled 6.3% in the first trading session after its earnings report.

Follow Patrick Seitz on X, formerly Twitter, at @IBD_PSeitz for more stories on consumer technology, software and semiconductor stocks.

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