Opinions
Keith Richards
Lam Research Corp
LRCX-Q
COMMENT
Dec 01, 2017
Stock price when the opinion was issued
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There are probably 4 in this category of semiconductor equipment suppliers. LRCX does design, manufactures the equipment, refurbishes and services the equipment. 12-month price target of $1069, decent runway. Reports soon. Very conservative, so we won't get surprised.
ASML using ultraviolet to etch chips has become the cat's meow, carving out a nice niche for EUVs. It's a bit cheaper. Reported last week, positive on top and bottom lines but lowered guidance. It sees demand coming back very strong in second half. Semis are a big thing with the AI revolution. Opportunity to buy a fantastic company at a cheaper price. 12-month price target of $1070.
For new money, put half in each.
Great opportunity to pick up 4 pillars. MU on the manufacturing, TSM for the foundry, LRCX or KLAC or ASML as the equipment suppliers, NVDA is a gift down here as a designer. And (he can't believe he's going to say this) even INTC; come 2025, it will be competitive with NVDA.
(Note 10 for 1 stock split October 3, 2024)
Got caught in the backwash of ASML. Reports tonight. He's on board with the analysts' average price target, getting close to being fully priced. Watch tonight when earnings come out, and listen for comparisons with ASML. Good support on the chart around $71. Next support after that is around $57. A great place to buy would be in low-mid $60s.
In the semi space, his firm tends to stay with a select few names that are best exposed to AI. That doesn't include the equipment makers, who are in a tricky situation. So many headlines involve the US trying to clamp down on China's access to everything related to semiconductors. Part of China's response to that was to buy up as much non-advanced-edge chip equipment as it could. An overhang going forward.
See his Past Top Picks for a name he likes a lot more.
He doesn’t know this company. The stock had fairly low volatility and is moving up, and it’s now moving into a pattern of regular sell-off and that's usually healthy. He doesn’t know how much lower it could go. He would suggest that as the stock gets around 5% off of his 200-day moving average, would be when you get into the time when you can see if the stock is going to maintain an up trend. If you get to a point where the stock stops falling and starts to reverse, then it might be a good point to buy it.