Lam Research Surges 1.6% on Earnings Beat and Raised Guidance as Top-Volume Stock Strategy Posts 166% Return

On August 1, 2025, Lam Research Corporation (LRCX) closed at $96.37, rising 1.61% amid a trading volume of 1.58 billion shares, a 39.09% decline from the previous day. The stock’s performance followed a Q4 2025 earnings report where the company reported $5.17 billion in revenue and $1.33 non-GAAP EPS, exceeding estimates. Analysts at Mizuho and Citigroup raised price targets to $120 and $113, respectively, citing strong revenue guidance and improved China demand. Lam also raised its 2025 wafer fabrication equipment forecast to $105 billion, though it warned of potential softness in the December quarter.

Management highlighted sustained demand in gate-all-around and mature node markets, with upgrades revenue hitting a record high. Gross margins surged to 50.3%, the highest since the 2012 merger with Novellus. The company attributed its outperformance to technological leadership in advanced packaging, molybdenum adoption in semiconductors, and operational efficiency. Institutional investors increased stakes in LRCX during the second and fourth quarters, with 84.61% ownership by hedge funds and institutional investors. Analysts remain optimistic, with a “Moderate Buy” consensus and an average price target of $107.09.

Backtest results for a strategy purchasing the top 500 stocks by daily trading volume and holding for one day showed a 166.71% return from 2022 to the present, outperforming the benchmark by 137.53%. This highlights the role of liquidity concentration in short-term price movements, particularly in volatile markets. The strategy underscores the importance of liquidity dynamics in investment decisions, suggesting that high-volume stocks can capitalize on market volatility-driven trends.