In a report released today, Joseph Moore from Morgan Stanley maintained a Hold rating on Lam Research (LRCX – Research Report), with a price target of $81.00.
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Joseph Moore has given his Hold rating due to a combination of factors that highlight both opportunities and challenges for Lam Research. The company is positioned to benefit from NAND upgrades, with a significant total addressable market (TAM) of $40 billion identified for these upgrades. Lam Research’s management is optimistic about capturing a substantial share of this market, thanks to their strong installed base and technological advancements in NAND. However, there are concerns regarding the sustainability of short-term spending in the NAND wafer fab equipment (WFE) market, which could impact the realized potential of this opportunity.
In addition to NAND, Lam Research is diversifying by expanding its presence in DRAM and logic markets. The company’s expertise in etch and deposition technology positions it well for potential growth in these areas, particularly with the ongoing transition to 3D structures. Despite these growth prospects, challenges such as customer hesitance to invest heavily and geopolitical restrictions, like the inability to ship to certain markets, present near-term hurdles. Furthermore, while the company is focusing on margin expansion and operational efficiency, these factors contribute to a cautious outlook, justifying the Hold rating.
In another report released today, Barclays also maintained a Hold rating on the stock with a $75.00 price target.