Why Lam Research Stock Easily Topped the Market on Thursday

Key Points

• A monster deal in the microprocessor world had a positive effect on many companies in, or associated with, the sector.

• Lam Research is a prime candidate, since it sells chip manufacturing equipment.

• 10 stocks we like better than Lam Research ›

Thanks to an earth-shaking event in the chip industry it serves so faithfully, semiconductor equipment specialist Lam Research (NASDAQ: LRCX) experienced a pleasant share price rise on Thursday. Bullish investors bid the company's stock up by almost 4% in price, effortlessly beating the 0.5% gain of the S&P 500 (SNPINDEX: ^GSPC) that trading session.

A memorable day for chip companies and their suppliers

Lam Research didn't have any news of its own to report, but we sure can't say that about two of its chipmaking customers, Nvidia and Intel.

Where to invest $1,000 right now? Our analyst team just revealed what they believe are the 10 best stocks to buy right now. Learn More »

Image source: Getty Images.

That morning, Nvidia announced it is ponying up $5 billion to invest in a meaningful chunk of Intel's common stock. It's doing so, in its words, so the two high-profile tech companies can "jointly develop multiple generations of custom data center and PC products that accelerate applications and workloads across hyperscale, enterprise, and consumer markets."

This is hardly the first big-money investment finding its way into Intel recently. No less an entity than the U.S. government announced near the end of August that it's taking a stake worth just under $10 billion in the company, and this was preceded shortly beforehand by a similar, $2 billion move made by SoftBank.

Increased business for equipment makers

With that amount of capital gushing into Intel, the tech hardware company is sure to significantly ramp up its manufacturing efforts. This, of course, means more business for specialty manufacturing equipment companies like Lam Research. At this point, it's hard to make meaningful estimates on this effect on the company's fundamentals, but there's little doubt it'll be positive.

The bullish investor reaction to the news, then, was entirely understandable and rather justifiable.

Should you invest $1,000 in Lam Research right now?

Before you buy stock in Lam Research, consider this:

The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and Lam Research wasn’t one of them. The 10 stocks that made the cut could produce monster returns in the coming years.

Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you’d have $662,520!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you’d have $1,043,346!*

Now, it’s worth noting Stock Advisor’s total average return is 1,056% — a market-crushing outperformance compared to 188% for the S&P 500. Don’t miss out on the latest top 10 list, available when you join Stock Advisor.

See the 10 stocks »

*Stock Advisor returns as of September 15, 2025

Eric Volkman has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Intel, Lam Research, and Nvidia. The Motley Fool recommends the following options: short November 2025 $21 puts on Intel. The Motley Fool has a disclosure policy.