On January 29, Chip-making equipment supplier Lam Research projected third-quarter revenue above Wall Street's expectations, driven by increased orders from chip companies amid the AI boom. The Fremont, California-based company's shares surged around 5% in after-hours trading.
The significant growth in artificial intelligence is expected to continue fueling substantial investments in cutting-edge nodes and advanced packaging, such as high-bandwidth memory (HBM) chips essential for high-end applications like AI training. This trend is benefiting equipment manufacturers like Lam Research.
Lam Research CEO Tim Archer stated, Increasing demands for chip performance align well with Lam's strengths, particularly in advanced deposition and etch applications, expected to form a larger portion of WFE (wafer fab equipment).
The company anticipates third-quarter revenue to be $4.65 billion, plus or minus $300 million, surpassing analysts' projection of $4.34 billion. Lam Research focuses on developing essential tools for semiconductor manufacturing, predominantly used in wafer processing and semiconductor device wiring.
Lam Research's major competitor, Netherlands-based ASML Holdings, reported fourth-quarter bookings exceeding analysts' expectations, indicating a promising future for AI chips.
The recent launch of a cost-effective AI assistant by China's AI startup DeepSeek utilizing lower-cost chips raised concerns about profitability and demand for pricier tech, affecting U.S. AI stocks like Lam Research, KLA Corp, and Applied Materials.
We anticipate growth in technology spending with non-Chinese customers to outpace sales decline from Chinese customers by 2025, stated Kinngai Chan, managing director at Summit Insights Group.
Lam Research reported second-quarter adjusted earnings per share of 91 cents, surpassing analysts' forecast of 88 cents. The company registered revenue of $4.38 billion for the three months ending on December 29, exceeding analysts' estimated $4.31 billion, marking the sixth consecutive quarter of revenue growth for the company.