Why Lam Research (LRCX) Is Gaining Traction Among Momentum Traders

Understanding Momentum in Stock Selection

When traders talk about momentum, they’re essentially riding the wave of a stock’s price movement. The core principle is straightforward: if a stock has established an upward trajectory, it tends to keep climbing—at least in the near term. This is the essence of momentum investing: buying stocks that are already moving up and betting they’ll continue their ascent. While momentum can seem like chasing performance, there’s actual science behind identifying which stocks have genuine staying power versus those just experiencing temporary spikes.

The Zacks platform uses what they call a Momentum Style Score to cut through the noise. This composite measure looks at two primary drivers: how a stock’s price has moved recently and how analysts are adjusting their earnings forecasts. For Lam Research (LRCX), a semiconductor equipment manufacturer, the numbers are compelling enough to warrant attention from momentum-focused investors.

Performance Metrics That Stand Out

Lam Research has been delivering the kind of price action that catches traders’ eyes. In just the past week, LRCX climbed 17.99% while its industry peer group—the Electronics-Semiconductors sector—only managed 6.27%. That’s a meaningful outperformance that suggests something is working in the company’s favor.

Zoom out a bit further, and the pattern becomes even more interesting. Over the last month, LRCX gained 34.72% against the industry’s 15.22%. This isn’t a one-week wonder; the momentum appears sustained. Looking at quarterly performance, Lam Research has surged 47.82% in the past three months compared to the S&P 500’s 4.57%. Year-to-date, the contrast is even starker: LRCX up 174.18% versus the broad market’s 19.92%.

Trading volume also matters for momentum confirmation. With an average of 11,499,857 shares traded daily over the last 20 days, Lam Research demonstrates the kind of participation that lends credibility to price moves. Rising volume during upward price action typically suggests conviction from institutional buyers rather than thin, superficial gains.

Earnings Revisions Pointing Higher

Beyond price movement, momentum investors watch analyst behavior closely. When multiple analysts simultaneously raise their earnings estimates, it often signals that underlying fundamentals are improving or that consensus expectations were too conservative.

For Lam Research, the recent trend is encouraging. In the past two months, three analysts bumped up their full-year earnings estimates while none moved lower. This one-directional movement helped lift the consensus target from $4.80 to $4.81. Looking ahead to the next fiscal year, the same pattern continues: three upward estimate revisions with zero downward adjustments. This suggests the narrative around LRCX’s business trajectory remains constructive.

What the Ratings Mean

Lam Research currently carries a Zacks Rank of #2 (Buy), paired with a Momentum Style Score of A. The combination matters because historical research has shown that stocks rated #1 or #2 by Zacks, when paired with A or B momentum scores, tend to outperform the broader market in the following month. This isn’t just one analyst’s opinion; it reflects a systematic screening of multiple factors coming together favorably.

Key Takeaway

If you’re building a watchlist of semiconductor equipment plays with genuine price momentum and improving analyst sentiment, Lam Research (LRCX) deserves consideration. The semiconductor sector remains a focal point for technology investors, and within that landscape, this company’s recent performance across multiple metrics—price appreciation, relative strength versus peers, and forward earnings revisions—suggests the momentum may have further to run in the near term.