What Happened:
Shares of semiconductor equipment maker Lam Research (NASDAQ:LCRX) jumped 5.02% in the afternoon session after memory chipmaker, Micron, reported earnings for the latest quarter. While the results trailed the consensus estimates for revenue and operating profits, Wall Street analysts noted that the semiconductor company had faced a steeper slump than anticipated, but signs of a rebound are emerging. The outlook from the company was optimistic, with Sanjay Mehrotra, the chief executive, affirming his "confidence" in the long-term demand scenario and envisaging "gradual improvements" in the industry's supply-demand equation. The stock reaction suggests that the market is putting more weight on longer-term risk/reward than near-term cyclical results.
What is the market telling us:
Lam Research's shares are very volatile and over the last year have had 32 moves greater than 5%. In context of that, today's move is indicating the market considers this news meaningful but not something that would fundamentally change its perception of the business.
Lam Research is up 24.2% since the beginning of the year, but at $514.51 per share it is still trading 9.57% below its 52-week high of $568.93 from March 2022. Investors who bought $1,000 worth of Lam Research's shares 5 years ago would now be looking at an investment worth $2,532.5.
Is now the time to buy Lam Research? Access our full analysis of the earnings results here, it's free.