Alright, alright, alright. Another day, another AI hype train leaving the station. Nvidia this, Broadcom that...give me a break. Everyone's slobbering all over themselves to crown the next AI king, and honestly, it's exhausting. But then I stumbled across this Lam Research (LRCX) thing, and I gotta admit, it kinda piqued my interest.
The "Picks and Shovels" Play
So, apparently, while everyone's busy arguing over who makes the best AI chips, Lam Research is selling the machines that make the chips. It's the classic "picks and shovels" play from the Gold Rush days. Smart. Real smart. They're not betting on one particular AI winner; they're betting on the whole damn industry.
Lam Research stock is up 117% this year? That's insane. I mean, Nvidia's great and all, but 42%? Broadcom at 56%? Please. Lam is absolutely crushing it. This Artificial Intelligence (AI) Chip Stock Has Crushed Nvidia and Broadcom This Year. It Can Still Soar Higher.
And they're trying to tell me that with the massive investments being made into AI infrastructure--Nvidia projecting $3-4 trillion over the next five years--that Lam isn't gonna benefit? Please. That's like saying the house doesn't get hotter when you crank up the thermostat.
PwC estimating $1.5 trillion spent on new chip fabs between now and 2030? Okay, now you're talking. That's a whole lotta scratch for Lam. But here's the real question: if everyone knows this, why isn't the stock even higher? Are people still sleeping on this? Or is there something else going on here that I'm not seeing?
Diving Into the Numbers (Sort Of)
Okay, so Lam's last quarter was pretty solid. Revenue up 27.5%, earnings up 46%. Not bad. CEO Tim Archer says AI plays "extremely well" to their strengths. You think? That's the understatement of the century.
They're saying every $100 billion in data center investment adds $8 billion to their addressable market? And upgrading existing facilities is another $40 billion opportunity? Let's be real, these numbers are so big they barely register. It's like trying to comprehend the national debt. My brain just kinda shuts down.
And their guidance for the current quarter is still strong. Revenue up 19%, earnings up 26%. They're even hinting at stronger growth later in the year. So, what's the catch? Because there's always a catch.
Oh, and by the way, can we talk about these analyst estimates? 15% revenue growth this year? 16% earnings growth? Are they serious? Lam is clearly sandbagging these numbers to make themselves look even better later on. It's the oldest trick in the book.
I saw some other dude, some "deep value investor" talking about Broadcom's Q4 earnings. Who cares? This is about Lam, and Lam is printing money right now.
The Valuation Question (and My Existential Crisis)
Okay, here's where things get interesting. They're saying Lam is trading at 33 times forward earnings, which is in line with the Nasdaq-100. Seems reasonable, right? A "no-brainer investment," they call it.
But wait a minute. If this company is the key to the AI revolution, shouldn't it be trading at a premium? Shouldn't investors be beating down the door to get a piece of this action? Or am I missing something here?
Maybe I'm just too cynical. Maybe everyone else sees the obvious and I'm just too busy looking for the hidden angle to see what's right in front of my face. Then again, maybe I'm the only sane one in a world gone mad. Who the hell knows anymore?
Offcourse, the stock market is a casino. And maybe Lam Research is just another shiny chip on the table.
So, What's the Real Story?
Look, I'm not gonna lie. I'm still not entirely convinced. But the numbers are hard to ignore. Lam Research is a legit play on the AI boom, and it's one that most people haven't even heard of yet. So, do your own damn research and decide for yourself. But don't come crying to me if it all goes to hell.
