Lam Research: Wouldn't Be Surprised If Consolidation Is Next (Rating Downgrade)

Lam Research has outperformed, surging over 120% in seven months versus the benchmark's 11%. LRCX now trades at a 62x forward P/E, a significant premium to peers at 25x, raising valuation concerns. Despite strong demand growth in wafer-fabrication and etching markets, much of the upside may be priced in. I downgrade LRCX from Buy to Hold, as premium valuation could mute further upside until fundamentals catch up.

My bullish take on Lam Research (LRCX) played out the way I had anticipated. And as a result, the stock surged more than 120% over the past 7 months since my previous coverage.