LRCX – Strong industry momentum and positive management sentiment suggest LRCX remains undervalued given current bearish market expectations, with further equity upside likely

• • • Lam Research Corporation (LRCX:USA)currently trades near historical averages relative to UAFRS-based (Uniform) Earnings, but well below corporate averages, with a 9.4x Uniform P/E, implying bearish expectations for the firm. However, management is confident in their product portfolio, WFE demand, and gross margin, implying longer-term outperformance is likely, particularly in light of strong industry momentum and a bullish analyst outlooky
    • Specifically, management is confident in their focus on strengthening the competitiveness and relevance of their product portfolio as the world transitions to the data economy, and in their 500 VECTOR Strata PECVD product shipments leading to enhanced codependency in multi-stack deposition applications in 3D NAND. Additionally, they are confident that silicon based artificial intelligence, driven by security and transportation needs, will drive WFE demand, and that gross margin for the period was towards the higher end of their guided range. Long-term expectations are therefore far too bearish, and, should the firm simply maintain recent Uniform ROA trends, further equity upside for LRCX would be warranted