Next Week's Earnings May Exceed Expectations, Boosting Stocks
Written by Emily J. Thompson, Senior Investment Analyst
Updated: 1 hour ago
0mins
Should l Buy LRCX?
Source: CNBC
- Earnings Season Begins: Next week, 83 companies in the S&P 500 and 7 in the Dow Jones are set to report earnings, which historically leads to stock price increases, as companies that exceed analyst expectations typically see post-earnings gains.
- Strong Performance from Lam Research: Semiconductor equipment maker Lam Research is scheduled to report earnings next Wednesday, having historically beaten earnings estimates 92% of the time, with an average post-report gain of 1.3%, indicating robust market performance and growth potential.
- ServiceNow's Earnings Outlook: Software company ServiceNow will also report next week, having topped earnings expectations 91% of the time, with an average gain of 3.1% after results, despite a nearly 37% decline in stock price this year, analysts remain optimistic about its future performance.
- Analyst Ratings Support: Citigroup and Oppenheimer have reiterated buy and outperform ratings for ServiceNow, respectively, expecting benefits from AI-related business trends and improved profitability, with target prices adjusted but still indicating significant upside potential.
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Analyst Views on LRCX
Wall Street analysts forecast LRCX stock price to fall
22 Analyst Rating
18 Buy
4 Hold
0 Sell
Strong Buy
Current: 260.960
Low
142.00
Averages
192.50
High
265.00
Current: 260.960
Low
142.00
Averages
192.50
High
265.00
About LRCX
Lam Research Corporation is a global supplier of wafer fabrication equipment and services to the semiconductor industry. The Company designs, manufactures, markets, refurbishes, and services semiconductor processing equipment used in the fabrication of integrated circuits. Its products and services are designed to help its customers build devices that are used in a variety of electronic products, including mobile phones, personal computers, cloud and enterprise servers, wearables, automotive vehicles and data storage devices. Its product families include ALTUS, SABRE, SPEED, Striker, VECTOR, Flex, Vantex, Kiyo, Versys Metal, Syndion, Coronus, and DV-Prime, Da Vinci, EOS, and SP Series. Its customer base includes semiconductor memory, foundries, and integrated device manufacturers that make products such as non-volatile memory, dynamic random-access memory, and logic devices. It offers services in areas like nanoscale manufacturing enablement, chemistry, plasma and fluidics, and others.
About the author
Emily J. Thompson
Emily J. Thompson, a Chartered Financial Analyst (CFA) with 12 years in investment research, graduated with honors from the Wharton School. Specializing in industrial and technology stocks, she provides in-depth analysis for Intellectia’s earnings and market brief reports.
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- Price Range Analysis: QQQM ETF's 52-week low is $176.19 per share, with a high of $266.60, and a recent trade at $266.16, indicating stability near its peak, which may attract investor interest in its price movements.
- Technical Analysis Tool: Comparing the current share price to the 200-day moving average can provide valuable insights for investors, helping them assess market trends and potential buy or sell opportunities.
- Unit Trading Mechanism: ETF units can be traded like stocks, meaning investors are actually buying and selling 'units', which enhances liquidity and allows the ETF to better adapt to market demand.
- Inflows and Outflows Monitoring: Weekly monitoring of changes in shares outstanding helps identify significant inflows or outflows; inflows indicate the need to purchase underlying assets, while outflows may lead to selling those assets, impacting the ETF's components.
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Next Week's Earnings May Exceed Expectations, Boosting Stocks
- Earnings Season Begins: Next week, 83 companies in the S&P 500 and 7 in the Dow Jones are set to report earnings, which historically leads to stock price increases, as companies that exceed analyst expectations typically see post-earnings gains.
- Strong Performance from Lam Research: Semiconductor equipment maker Lam Research is scheduled to report earnings next Wednesday, having historically beaten earnings estimates 92% of the time, with an average post-report gain of 1.3%, indicating robust market performance and growth potential.
- ServiceNow's Earnings Outlook: Software company ServiceNow will also report next week, having topped earnings expectations 91% of the time, with an average gain of 3.1% after results, despite a nearly 37% decline in stock price this year, analysts remain optimistic about its future performance.
- Analyst Ratings Support: Citigroup and Oppenheimer have reiterated buy and outperform ratings for ServiceNow, respectively, expecting benefits from AI-related business trends and improved profitability, with target prices adjusted but still indicating significant upside potential.
See More
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- Price Range Analysis: QQQM ETF's 52-week low is $176.19 per share, with a high of $266.60, and a recent trade at $266.16, indicating stability near its peak, which may attract investor interest in its price movements.
- Technical Analysis Tool: Comparing the current share price to the 200-day moving average can provide valuable insights for investors, helping them assess market trends and potential buy or sell opportunities.
- Unit Trading Mechanism: ETF units can be traded like stocks, meaning investors are actually buying and selling 'units', which enhances liquidity and allows the ETF to better adapt to market demand.
- Inflows and Outflows Monitoring: Weekly monitoring of changes in shares outstanding helps identify significant inflows or outflows; inflows indicate the need to purchase underlying assets, while outflows may lead to selling those assets, impacting the ETF's components.
See More
Next Week's Earnings May Exceed Expectations, Boosting Stocks
- Earnings Season Begins: Next week, 83 companies in the S&P 500 and 7 in the Dow Jones are set to report earnings, which historically leads to stock price increases, as companies that exceed analyst expectations typically see post-earnings gains.
- Strong Performance from Lam Research: Semiconductor equipment maker Lam Research is scheduled to report earnings next Wednesday, having historically beaten earnings estimates 92% of the time, with an average post-report gain of 1.3%, indicating robust market performance and growth potential.
- ServiceNow's Earnings Outlook: Software company ServiceNow will also report next week, having topped earnings expectations 91% of the time, with an average gain of 3.1% after results, despite a nearly 37% decline in stock price this year, analysts remain optimistic about its future performance.
- Analyst Ratings Support: Citigroup and Oppenheimer have reiterated buy and outperform ratings for ServiceNow, respectively, expecting benefits from AI-related business trends and improved profitability, with target prices adjusted but still indicating significant upside potential.
See More
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- Market Performance: The S&P 500 index fell by 0.15%, the Dow Jones Industrial Average decreased by 0.06%, and the Nasdaq 100 dropped by 0.21%, indicating a slight market pullback after reaching new highs, particularly pressured by weakness in chipmakers.
- Economic Data: Initial jobless claims in the US fell by 11,000 to 207,000, indicating a stronger labor market than the expected 213,000; additionally, the Philadelphia Fed business outlook unexpectedly rose by 8.6 to a 15-month high of 26.7, reflecting potential economic recovery.
- Oil Price Fluctuations: WTI crude oil prices increased by over 1% as the US naval blockade of the Strait of Hormuz enters its fourth day, which could exacerbate global oil and fuel shortages, impacting future energy market stability.
- Earnings Season: Q1 earnings for the S&P 500 are projected to rise by 12% year-over-year, but excluding the technology sector, the earnings growth is only 3%, the lowest in two years, indicating a cautious market outlook on profit growth.
See More
ASML Valuation Anomaly Amid Market Dynamics
- Valuation Anomaly: ASML's relative pricing against US peers has fallen to its lowest level in a decade, currently trading at a forward P/E of 37 times, representing a 17% premium over Applied Materials, indicating a market reassessment of its valuation.
- Market Dynamics Shift: ASML is now priced at about a 5% discount to Lam Research for the first time in 14 years, despite its unique supply position in extreme ultraviolet lithography systems, reflecting cautious market sentiment regarding its future growth.
- Analyst Insights: JPMorgan analyst Sandeep Deshpande highlighted that ASML's valuation may be misaligned with its structural advantages, as the stock has risen 36% year-to-date but lags behind peers like Applied Materials and Lam Research, which have gained over 50%, suggesting that relative underperformance may be driving valuation compression.
- Mixed Market Reaction: Despite ASML raising its full-year sales guidance, the stock declined 4.2% on Wednesday, reflecting concerns over high expectations, while a 2.0% rebound on Thursday suggests that long-term AI-driven demand remains intact, but short-term performance may depend on the relationship between earnings growth and current valuation levels.
See More
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- Record for Momentum ETF: The iShares MSCI USA Momentum Factor ETF (MTUM) hit a new high on Thursday, marking its tenth consecutive winning session, reflecting strong market confidence in growth stocks and suggesting a potential upward trend for the overall market.
- Market Rebound Signs: MTUM, which was down over 7% year-to-date, has now risen 8%, coinciding with the S&P 500's recovery, indicating that the market may be experiencing a broader rebound as investor sentiment turns optimistic.
- Outstanding Stock Performance: Since the onset of the Iran war, Bloom Energy's stock has surged over 40%, while Intel has also risen more than 40%, showcasing the appeal of momentum stocks, particularly following expanded partnerships with major tech companies.
- Momentum Drives Market: Jeff Kilburg, founder of KKM Financial, emphasized that momentum is the primary driver of market gains, predicting that the S&P 500 will reach new all-time highs, with the return of momentum providing strong support for the market.
See More
Musk Urges Terafab Suppliers to Accelerate Efforts
- Supplier Urgency: The Terafab team has reached out to semiconductor equipment suppliers, including Applied Materials, Lam Research, and Tokyo Electron, requesting pricing and delivery timelines within days over a holiday weekend, indicating Musk's strong push to accelerate chip manufacturing plans, which could expedite Tesla's AI hardware strategy.
- Computing Capacity Goals: Terafab is expected to deliver about one terawatt of annual compute capacity, which will not only support Tesla's vehicle autonomy and robotics programs but also provide infrastructure for space-related initiatives tied to SpaceX, highlighting Tesla's ambitious goals in the AI sector.
- Positive Market Reaction: Following Musk's push for suppliers to accelerate, shares of Applied Materials and Lam Research rose over 1% and 3% respectively, while Tesla's stock climbed about 1%, reflecting market optimism regarding Tesla's AI chip manufacturing plans.
- Future Development Potential: Analysts suggest that the construction of Terafab could help address future chip and memory supply constraints, becoming a crucial part of Tesla's long-term AI infrastructure strategy and potentially paving the way for a future merger with SpaceX.
See More
