The stock of semiconductor equipment maker Lam Research (LRCX -3.70%) has done very well of late (it's up 87% over the past year), yet one pundit tracking the company believes it can go even higher. In his view, the stock is well positioned to break through the $1,000-per-share level, setting a new all-time-high share price.
Stifel analyst feels Lam Research could touch a new record high
In mid-April, Stifel Financial prognosticator Brian Chin raised his 12-month price target on Lam Research to $1,050 per share, adding an even $100 to his previous fair value estimation of $950. He maintained his buy recommendation on the cutting-edge chipmaking equipment specialist as he did so. The target suggests a nearly 12% upside for the stock over the next 12 months.
Lam Research's recent popularity is due in large part to the explosive growth in interest regarding anything artificial intelligence (AI)-related. This has led to great interest from investors eager to profit from the sharp rise of the technology. The company is a key manufacturer of the equipment used by companies that make memory chips, a segment that will likely rocket higher in demand due to the high-bandwidth memory (HBM) needed to power AI capabilities.
In Chin's latest note on Lam Research, he wrote, "We remain upbeat on the initial areas of pickup -- HBM and advanced packaging -- and expect to see incremental evidence of this broadening."
A monster opportunity for businesses that can take advantage
While I feel this latest evaluation of Lam Research is basically accurate, I take Chin's point that the company faces some headwinds (most notably the economic struggles of China, an important customer base).
Still, for me, it's indisputable these days that AI is the high-momentum technology of the moment. Alone, it has the power to provide quite the lift to companies that effectively develop or deploy it -- or supply the equipment for its rise. In my view, Lam Research is the right business at the right time to take advantage.
