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Analysts, including Citi Research’s Atif Malik, have expressed limited concern over the potential impact of the U.S. ban on artificial intelligence (AI) technology sales to China on Lam’s operations. Malik maintains an $800 price target on Lam. This perspective aligns with that of ASML, which has stated that the addition of 13 Chinese companies to the export entity list will only have a minor effect. ASML has reported lower orders due to cash-cautious customers.
Raymond James analyst Srini Pajjuri also anticipates minimal risk from China export controls for the wafer-fab-equipment market. He projects that the market will bottom out by the end of this year and expects high-single-digit growth in the long term. Pajjuri suggests that demand from generative AI will compensate for slower PC and smartphone demand.
Analysts are particularly interested in understanding Lam’s perspective on the wafer-fab-equipment market bottoming out and its future growth projections. As such, the forthcoming earnings report from Lam is expected to provide insights into these areas.
InvestingPro data reveals that Lam has a market cap of 84.69B USD and a P/E ratio of 19.35, suggesting that it is a significant player in the market. The company’s revenue for the last twelve months (LTM2023.Q4) was 17428.52M USD, with a gross profit of 7855.09M USD, indicating a strong financial position. Despite a quarterly revenue growth decline of -30.81%, Lam has managed to maintain a positive revenue growth of 1.17% over the last twelve months.
InvestingPro Tips also highlights that Lam operates with a high return on assets, which stood at 25.08% for the last twelve months. The company has consistently increased its earnings per share and has raised its dividend for 9 consecutive years. This demonstrates Lam’s commitment to providing value to its shareholders. For more tips like these, consider checking out InvestingPro’s product which provides additional insights here.
In conclusion, while analysts anticipate a sales decline for Lam in the current year, the company’s strong financial position, high return on assets, and commitment to shareholder value suggest that it is well-equipped to navigate potential challenges and continue its growth trajectory. The upcoming earnings report is expected to provide further insights into Lam’s operations and future prospects.
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