Why Lam Research Stock Topped the Market on Thursday

One of the better performing chip stocks this year, Lam Research (NASDAQ: LRCX), had yet another good day on the market Thursday. On the back of a recommendation upgrade from one analyst and several price-target raises from others, the company's shares closed the day nearly 2% higher. That was more than sufficient to beat the slumping S&P 500 index, which fell by 0.4%.

From blah to buy

The recommendation change came from Susquehanna Research one day after Lam's research day. Susquehanna now feels Lam is worthy of a positive (i.e., buy) tag; previously, it had flagged the stock as only a neutral. It also raised its price target on the shares to $125 apiece.

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According to reports, the new evaluation was based on Lam's successful expansion into markets new to the company. The Susquehanna update also sang the praises of management's attempts to diversify revenue according to device type, among other positive tailwinds.

Not every word in the new analysis was bullish. The researcher cited several potential pitfalls for Lam, including negative macroeconomic developments and erosion in market share.

A price-target raise rush

While the other analysts tracking Lam stock didn't go as far as a recommendation upgrade, a clutch of them lifted their price targets following investor day.

One of the more bullish fresh takes was that from TD Cowen's Krish Sankar, who added $10 per share to his fair value assessment for a new level of $110. He maintained his buy recommendation and what's more anointed Lam as TD Cowen's top stock pick for this year.

Since Lam is a manufacturer of cutting-edge equipment used in the making of computer chips, it very much feels like a company at the right time doing the right work. I'm hardly surprised analysts are bullish on this stock, and I'd agree with the sunnier assessments of it.

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Eric Volkman has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Lam Research. The Motley Fool has a disclosure policy.