$LRCX · Mark Roussin, CPA · 2026-10-27

This brings us to the third stock, Lam Research, with the ticker symbol LRCX. This is one of the most interesting companies on today's list because it has just announced its earnings .

Despite achieving very strong financial results, the stock came under significant selling pressure. But for us as long-term investors, this is a gift and an overreaction in the short term.

When investors think about the semiconductor industry , they typically focus on companies that design chips, such as Nvidia, AMD, Broadcom, and the like. But there is another part of the industry that is extremely vital, and that is the equipment needed to manufacture these advanced chips.

This is where Lam Research comes in. Lam develops equipment used in semiconductor manufacturing. Its technologies are involved in processes such as drilling and sedimentation. These processes are essential for the production of increasingly advanced semiconductors.

Who are some of Lam Research's biggest clients ? Micron, SK Hynix, and Taiwan Semiconductor, to name a few . Therefore, as all these companies strive to increase their production capacity, the demand for advanced manufacturing equipment is increasing.

Lam Research is well-positioned to benefit from these investments.

Now, let's take a look at the latest financial results that the company announced again on October 21. The company reported revenues of nearly $8.2 billion for its quarter ending in September.

This represents an increase of approximately 54% compared to the previous year. Adjusted earnings amounted to $2.20. Operating margins reached approximately 40%. Think about it.

We are talking about a semiconductor equipment company that generates more than $8 billion in quarterly revenue with operating margins approaching 40%. Those are impressive figures .

However, the company's stock fell after the announcement. You might wonder, why did that happen? Because Wall Street was focused on future expectations. Management projected revenues of approximately $8.6 billion for the December quarter.

Although this represents additional growth, investors were expecting more.

Management discussed supply chain constraints that may limit shipments in the near term, giving me the impression that it is just a matter of timing. But the situation was certainly not entirely rosy .

China still poses a risk to the company. Sales in China accounted for about 35% of Lam's revenue in the September quarter, but management expects a significant decline in that contribution during the December quarter.

So, there are legitimate concerns about this . I don't want to ignore those concerns.

But here's what makes the situation interesting. The stock is falling even though the underlying business has just posted record revenues and profits. Now , this does not automatically mean that the stock is undervalued, but it does create an opportunity to examine whether investors have become overly pessimistic about the company’s long-term prospects.

I believe that semiconductor equipment manufacturers have an attractive opportunity over the next few years, because the demand for AI computing not only creates a demand for more chips, but also creates a demand for the equipment needed to manufacture those chips.

Now turning to my "Edge" site, we can see that shares of "Lam Research" are still up 51% over the past twelve months , even after the large sell-off that followed the earnings announcement, in which the stock fell by more than 10% .

However, you can see on the right that the "Edge" points are still steady at a score close to 78.

Looking ahead to 2027, Lam Research's earnings per share are expected to grow by 65%, giving it a future price-to-earnings ratio of just under 24, which I find interesting. It's not the deal of a lifetime, but if the stock continues to fall to around 22 times or less, I will definitely buy before 2027.

Analysts remain bullish on the stock, setting a 12-month price target of $375 per share. This means, on average, a potential increase of more than 50% from current levels. But here's my approach to dealing with it .

I believe that "Lam Research" is a high-quality company operating in an industry with attractive long-term demand . After the recent sales, I've started to feel increasingly interested in this valuation.

For investors looking beyond companies that simply design AI chips, I think Lam Research deserves serious consideration.

Lam Research provides the equipment needed to manufacture advanced semiconductors. Owning these four companies does not automatically mean you have diversified investments. Because despite working in different industries, they share exposure to technology investment and the broader AI infrastructure cycle.

If major technology companies begin cutting capital expenditures, many of these companies could come under pressure. This is what we have witnessed over the past few weeks .

Because I want exposure to long-term growth opportunities without making my entire portfolio dependent on one area of the market. Now, when it comes to buying these stocks, I'm not trying to accurately predict the bottom.

I certainly don't suggest that investors put all their eggs in one basket. Instead, I prefer to take advantage of fluctuations gradually. This could mean buying shares in stages, or, depending on the company and the option premiums available, considering cash-guaranteed put options.

But the most important thing is to understand the business and determine how much you are willing to pay for it. Because a great company can still be a bad investment if you pay too much.

A lower share price does not automatically mean an attractive valuation. That's why I want to continue monitoring earnings, free cash flow, balance sheets , and future growth projections .

So, that's all . There are four stocks I'm looking forward to potentially buying before the end of 2026.

While the recent sell-off in the technology sector has created uncertainty, I believe it also creates opportunities because some of these companies continue to achieve exceptional revenue and profit growth.

Other companies, however, are benefiting from the infrastructure investments required to support artificial intelligence, and many of them are currently trading below their recent highs.

This does n't mean we've hit rock bottom, nor does it mean every stock on the list is cheap, but I think these four deserve a closer look as we approach 2027.

Now, I want to hear your thoughts. If you could buy just one of these four stocks before the end of this year, which one would you choose? Nvidia, AMD, L&M Research, or Sterling?