Lam Research Plummets 4.3% Amid U.S. Export Curbs and Sector Turbulence

Summary
• Lam Research (LRCX) trades at $95.84, down 4.3% from its previous close of $100.15
• Intraday range spans $94.11 to $97.265, reflecting sharp volatility
• Turnover surges to 6.9 million shares, outpacing its 0.55% average daily turnover rate

Today’s selloff in Lam Research underscores a broader sector-wide jolt triggered by U.S. export restrictions on semiconductor equipment sales to China. With the stock trading near its 52-week low of $56.32 and 52-week high of $108.02, investors are recalibrating risk amid tightening geopolitical controls and sector-specific headwinds.

U.S. Export Restrictions and Sector-Wide Uncertainty Drive Sharp Selloff
The U.S. government’s revocation of VEU (Validated End User) status for TSMC, Samsung, and SK Hynix has sent shockwaves through the semiconductor equipment sector. Lam Research, a key supplier of wafer fabrication tools to Chinese chipmakers, faces direct exposure to these licensing changes. The policy shift forces suppliers to seek individual approvals for equipment shipments to China, creating operational uncertainty and delaying revenue cycles. This regulatory overhang, combined with sector-wide concerns over China’s AI chip self-reliance push, has triggered a risk-off sentiment, amplifying Lam’s intraday decline.

Semiconductor Equipment Sector Under Pressure as Applied Materials Also Slides
The semiconductor equipment sector is broadly under pressure, with Applied Materials (AMAT) down 2.77% on similar export control concerns. While Lam Research’s China exposure is smaller than Samsung or SK Hynix, its proximity to the U.S.-China tech rivalry makes it a proxy for sector-wide risks. The sector’s 52-week high of $108.02 for Lam Research contrasts starkly with its current price, reflecting a 12% pullback from its peak. This divergence highlights the sector’s vulnerability to geopolitical policy shifts.

Options Playbook: Capitalizing on Volatility with Strategic Put and Call Selection
• MACD: 1.04 (bearish crossover with signal line at 1.12)
• RSI: 46.56 (oversold territory)
• Bollinger Bands: $94.80 (lower band) vs. $107.45 (upper band)
• 200D MA: $82.72 (price above long-term support)

Lam Research’s technicals suggest a short-term bearish trend but a long-term bullish setup. Key levels to watch include the 30D support at $98.85 and 200D support at $74.54. The stock’s beta of 1.66 amplifies its volatility, making options a strategic tool for directional bets.

Top Options Picks:
• LRCX20250912P90 (Put):
- Strike: $90, Expiry: 2025-09-12
- IV: 43.83% (moderate)
- Delta: -0.1976 (moderate sensitivity)
- Theta: -0.0320 (high time decay)
- Gamma: 0.0382 (responsive to price swings)
- Turnover: 48,058 (liquid)
- Leverage Ratio: 115.23% (high potential return)
- Payoff (5% downside): $5.84 per contract
- Why: Balances leverage and liquidity for a bearish play with defined risk.

• LRCX20250912P92 (Put):
- Strike: $92, Expiry: 2025-09-12
- IV: 42.05% (reasonable)
- Delta: -0.2803 (higher sensitivity)
- Theta: -0.0216 (moderate decay)
- Gamma: 0.0482 (high responsiveness)
- Turnover: 4,463 (liquid)
- Leverage Ratio: 75.90% (attractive reward/risk)
- Payoff (5% downside): $7.84 per contract
- Why: Strong gamma and delta for capitalizing on near-term volatility.

Action: Aggressive bears may consider LRCX20250912P90 into a breakdown below $94.80. For a balanced approach, LRCX20250912P92 offers higher gamma with moderate IV.

Backtest Lam Research Stock Performance

Act Now: Position for Volatility as Sector Uncertainty Lingers
The selloff in Lam Research reflects a confluence of regulatory headwinds and sector-specific risks, but its long-term fundamentals remain intact. Investors should monitor the 200D MA at $82.72 as a critical support level and watch for a potential rebound above the 30D MA at $100.05. Applied Materials (AMAT), the sector leader, is down 2.77%, signaling broader caution. For those with a short-term bearish bias, the selected put options offer high leverage and liquidity. Watch for $94.80 breakdown or regulatory clarity to pivot strategy.