Jim Cramer - Mad Money Lam Research Corp LRCX-Q BUY May 28, 2024

Equipment suppliers for semiconductor industry. Older school, cheaper than cutting-edge lithography companies. 12-month price target for LRCX of $1070, up 35% in last 100 days, great company, seems very competitive. Closest comparison would be to KLA.

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.

Take a bit off, and put proceeds into its competitor ASML.

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.

Is very oversold. Could be a coiled spring with 200 points up or 50 down. Has known this company for a long time.

(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.

They will do well. They're not linked entirely to ASML. LRCX already said how much Chinese exposure they have and the reduced it.

There's a semi cycle and a new business line. Anything AI-related in semis has rocketed, and anything not is in a typical downcycle. A good long-term hold.

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.