Shares of semiconductor manufacturing equipment company Lam Research (LRCX +1.73%) jumped on Thursday after the company reported financial results for its fiscal quarter that ended Dec. 29, 2024. As of 12:20 p.m. ET, Lam Research stock was up about 8%.
Jumping right over a low bar of expectations
Lam Research's management team had forecast revenue of around $4.3 billion for the most recent quarter. And it was on target with its guidance considering the company generated revenue of almost $4.4 billion. That was more than what analysts had expected.
NASDAQ: LRCX
Key Data Points
Lam Research also did well with its profit margins. The company had a gross margin of 47.4%, an operating margin of 30.5%, and earnings per share (EPS) of $0.92. All of these numbers were toward the higher end of management's guidance.
Going into the report for the December quarter, Lam Research stock was trading near its 52-week low, perhaps suggesting that investors had low expectations. Therefore, the stock is rising today as the company just exceeded guidance and beat expectations.
What's next for Lam Research?
The largest part of Lam Research's business is China -- 31% of its revenue for the December-ended quarter came from that region. With the rumblings of trade wars and tariffs, investors are understandably cautious.
That said, Lam Research likes its odds for 2025. Management says it expects spending for semiconductor wafers to increase and it expects enterprises to be upgrading memory products, leading to the opportunity for Lam Research to grow its profits in the coming year.
Longer-term, Lam Research also likes its odds considering spending for its products is only expected to increase. It's fair to debate whether the stock is a good value today. But there's good reason to believe the business is well positioned, which is something for investors to keep in mind.
