As semiconductor industry peer Applied Materials (AMAT) tries to etch in a new breakout, Lam Research (LRCX) is testing a buy point of its own. LRCX stock and AMAT stock have both just joined the IBD Breakout Stocks Index.
While AMAT stock just fell off the IBD Big Cap 20, LRCX stock remains on this list of leading large caps.
With a 97 Composite Rating, LRCX and AMAT are just behind ASML (ASML) and Kulicke & Soffa Industries (KLIC).
The overall industry ranks No. 52 out of the 197 groups IBD tracks.
Who Joins LRCX Stock, AMAT Stock On The IBD Breakout Stocks Index?
LRCX Stock Near High As Next-Gen Technology Spurs Growth
With over 12,000 employees and reported just under $4 billion in revenue last quarter, Lam Research is a global supplier of innovative wafer fabrication equipment and services to the semiconductor industry. According to the Silicon Valley-based company, today nearly every advanced chip is built with Lam technology.
In January, Lam Research announced Vantex. The etch technology helps deliver higher performance and greater extendibility for current and future generation NAND and DRAM memory chips. The Silicon Valley-based company says Vantex is “the latest in dielectric etch technology designed specifically for Sense.i, the most intelligent etch platform available today.”
Such technical advances have boosted LRCX stock and helped Lam Research etch seven straight quarters of rising earnings growth. EPS gains have jumped from a 32% decline in the June 2019 quarter to an 88% gain in its most recent report.
Revenue gains have also accelerated in all but one of the last seven quarters, including a 54% sales spike in its latest report.
For the upcoming quarter, analysts expect Lam Research to deliver 58% EPS growth, leading to a 68% gain for the year.
Boosted by a 26.2% annual sales profit margin and a 48.2% return on equity for its prior fiscal year, Lam Research sports on A SMR Rating.
LRCX Stock Joins AMAT Stock Near Buy Point
With both semiconductor stocks showing strong fundamentals, LRCX stock and AMAT stock are each vying for new breakouts.
LRCX stock tried to open the shortened week with a move past its 669.10 buy point in a third-stage chart pattern, but reversed to close below it. On Wednesday, Lam Research again tried to rally, but failed to close in positive territory. But LRCX continues to trade above its 10-week moving average as its relative strength line tries to rebound after slumping.
AMAT stock is showing similar action as it takes aim at a 146.10 entry in a second-stage pattern. Applied Materials managed to eke out a fractional gain Wednesday.
Look for both semiconductor stocks to break past their latest buy point in volume at least 40% higher than normal.
IBD Breakout Opportunities ETF
The IBD Breakout Opportunities ETF from Innovator Capital Management tracks the IBD Breakout Stocks Index. As with other index ETFs, this allows you to essentially invest in the entire index in addition to or rather than buying individual stocks. Learn more here about the ETF and Innovator funds.
Follow Matthew Galgani on Twitter at @IBD_MGalgani.
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