1 Semiconductor Stock to Buy Hand Over Fist After Micron Technology’s Stellar Report

Micron Technology (NASDAQ: MU) wowed investors last week with an outstanding set of results for the second quarter of its fiscal 2024, reporting a massive jump in its revenue and a surprise profit, and this sent shares of the memory specialist soaring.

The chipmaker benefited from a jump in demand for memory chipsr. As a result, its revenue increased a massive 58% year over year to $5.8 billion. Micron is anticipating stronger year-over-year growth of 76% in its top line in the current quarter, driven by increased appetite for memory chips from artificial intelligence (AI) servers, smartphones, and personal computers (PCs).

The memory industry has witnessed a significant turnaround of late as demand for consumer electronics is back on track, while AI has created the need for advanced memory chips known as high-bandwidth memory (HBM). Micron management remarked on the latest earnings-conference call that its HBM capacity for 2024 is sold out, while the “overwhelming majority of our 2025 supply has already been allocated.”

This is good news for Lam Research (NASDAQ: LRCX), a semiconductor equipment manufacturer that gets a big chunk of its revenue from selling its goods to memory manufacturers such as Micron. Let’s look at the reasons why Micron’s latest results are an indication that investors would do well to buy Lam Research stock right now.

Lam Research is about to witness a solid turnaround

In the most recent quarter, Lam Research got 48% of its revenue from selling semiconductor manufacturing equipment to memory manufacturers. This explains why the company’s results in recent quarters have been poor. An oversupply in the memory market forced the likes of Micron and others to put a hold on capacity expansion, and so Lam’s top and bottom lines have been heading south.

LRCX Revenue (TTM) Chart

Analysts expect the company to finish the current fiscal year with a 22% decline in revenue to $13.6 billion. Additionally, earnings are expected to drop to $26.76 per share from $34.16. However, as the following chart shows, Lam Research’s revenue and earnings could jump…

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