In the field of success stories, Lam Research Corporation NASDAQ: LRCX has been one of the absolute winners of the AI boom. As of May 7, the stock is up nearly 300% over the past 12 months, more than 70% year to date, and more than 30% in the past month alone.
While it’s undoubtedly good for those who have been on the whole ride, the pure nature of the one-way movement, especially in recent weeks, can make investors cautious right now.
However, Lam Research continues to attract new attention, helped by its earnings two weeks ago, growing interest in the use of AI infrastructure, and now new speculation linked to SpaceX’s semiconductor expansion plans. The result is a stock that is already rising to the proverbial stratosphere, yet analysts still argue that the best is yet to come. Let’s dive in and take a closer look at why.
Strong Profits Justify the Bull’s Case
The biggest reason Lam Research continues to thrive is that the company is no longer just trading on hype. This may have been the case last year. Still, investors are now seeing clear evidence that the underlying business is directly benefiting from the AI-driven explosion in semiconductor demand.
Last month’s earnings report underscored that view in a big way. Revenue growth was strong, margins expanded, and management delivered exactly the kind of confidence investors had been waiting for. More importantly, the company indicated that demand for advanced semiconductor manufacturing equipment continues to accelerate as chipmakers race to increase AI-related production capacity.
This is important because Lam sits at the center of the semiconductor manufacturing ecosystem. As more milling companies invest in advanced chips, memory, and foundry capabilities, greater is the demand for Lam’s equipment and technology.
Investors are increasingly seeing that volatility. Like many other companies MarketBeat recently covered, Lam is no longer considered another cyclical semiconductor stock. Instead, it is increasingly seen as a direct infrastructure play to the AI boom itself. That difference helps explain why the rally continued in May even after such big gains in the past 12 months.
SpaceX News Adds Another Layer of Excitement
Another factor that helped fuel the latest leg of the rally came on Wednesday, May 6, in the form of reports about SpaceX’s ambitious Terafab semiconductor project in Texas.
According to reports, SpaceX is planning a large semiconductor manufacturing facility that will produce its advanced 2nm chips by the end of the decade, to support its AI and robotics ambitions. Lam Research has reportedly emerged as one of the key equipment suppliers that Elon Musk has contacted about the project.
Although the details are still speculative, investors are quickly seeing the potential. And as Intel Corp NASDAQ: INTC Stocks responded earlier this week to news that Apple Inc NASDAQ: AAPL he considered them partners, Lam’s shares went to all-time highs.
This is exactly the kind of narrative that investors love. It could tie Lam Research directly into one of the hottest topics in the market while also linking the company to Elon Musk, AI, home manufacturing, robotics, and next-generation semiconductor infrastructure.
Whether the project ultimately reaches its full potential remains to be seen. Still, the fact that Lam is associated with it at all reinforces the notion that the company sits at the center of AI infrastructure development.
Rally Extends, But Trend Remains Strong
Investors should not ignore how much the stock has extended in the near term. A 300% rally over 12 months is impressive by any standard, and the recent leg up has been aggressive.
Technically speaking, Lam Research is clearly strengthened, and the time to take profits or consolidation would be normal after a move like this. Investors considering chasing the stock here need to face the facts about that risk.
Lam Research Corporation (LRCX) price chart for Thursday, May 7, 2026
However, the wider setup still looks good. Importantly, analysts remain bearish despite the huge gains it has seen. The likes of Deutsche Bank recently reiterated its buy rating near the $325 price target, while Oppenheimer did the same, only with a $330 target.
For investors on the sidelines wondering if it’s worth chasing the stock at these levels, that’s important, because it suggests that Wall Street still sees a reasonable future, even after the strongest market rallies. The stock may need time to cool down in the short term, but the big picture continues to point to the upside.
Lam’s research appears well-placed to benefit from an unusual combination of strong execution, strong industry tailwinds, and accelerating investor enthusiasm for AI infrastructure. And as long as companies continue to race to build the infrastructure that powers the AI economy, Lam looks set to remain one of the biggest winners.
Before you consider Lam Research, you’ll want to hear this.
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