Lam Research Plunges 7.33% Amid Profit-Taking Ranked 27th in 2.33B Trading Volume

Lam Research (LRCX) fell 7.33% on August 15, 2025, with a trading volume of $2.33 billion, ranking 27th in market activity. The decline followed six consecutive days of gains and strong technical indicators, including earnings per share (EPS) 3.8% above estimates and revenue matching forecasts. Analysts attributed the drop to profit-taking and volume-price divergence, though the stock remains in a bullish trend with eight of ten recent days showing gains. Technical analysis suggests continued upside potential, with moving averages still signaling buy opportunities.

Short interest in LRCX decreased by 1.7% in July to 30.18 million shares, reflecting a short interest ratio of 3.0. This indicates moderate bearish sentiment, though the decline in short volume suggests improving investor confidence. Institutional investors, including Citigroup and Goldman Sachs, hold short positions, as disclosed in SEC filings. The reduction in short interest contrasts with broader market volatility, as U.S. consumer sentiment fell to 58.6, below expectations, and global economic concerns, particularly weak Chinese data, weighed on investor sentiment.

Macro factors also impacted LRCX, with U.S. President Trump’s announcement of potential 100%-300% tariffs on semiconductors introducing sector-specific risks. The move, aimed at protecting domestic manufacturing, could affect demand for Lam’s semiconductor equipment. Meanwhile, weak Chinese economic reports, including slower retail sales and industrial production, raised concerns about global demand for tech products. These developments, combined with a broader market selloff (S&P 500 down 0.26%, Nasdaq 100 down 0.45%), amplified pressure on the stock.

A strategy of buying the top 500 stocks by daily trading volume and holding for one day generated a $2,550 profit from 2022 to the present, despite a maximum drawdown of -15.4% on October 27, 2022. This highlights the strategy’s volatility but also its resilience, recovering from the peak drawdown to achieve a positive return over the period.