Heartland Mid Cap Value Fund: A Standout Quality Value Holding is Lam Research (LRCX)

Heartland Advisors, an investment management company, released its “Heartland Mid Cap Value Fund” third-quarter 2025 investor letter. A copy of the letter can be downloaded here. The portfolio increased 1.63% in the quarter, lagging behind the Russell Midcap® Value Index’s 6.18% gain. Stock selection was the primary contributor to the underperformance. The market witnessed the trends from Q2 accelerate, with optimism about the AI boom and rising electricity demand pushing large- and mid-cap growth stocks to new highs regardless of business model quality or valuation. Thus, the third quarter is a period when focusing on valuations can be detrimental. In addition, you can check the fund’s top 5 holdings to determine its best picks for 2025.

In its third-quarter 2025 investor letter, Heartland Mid Cap Value Fund highlighted stocks such as Lam Research Corporation (NASDAQ:LRCX). Lam Research Corporation (NASDAQ:LRCX) designs, manufactures, and services semiconductor processing equipment. The one-month return of Lam Research Corporation (NASDAQ:LRCX) was 10.20%, and its shares gained 53.29% of their value over the last 52 weeks. On October 10, 2025, Lam Research Corporation (NASDAQ:LRCX) stock closed at $131.37 per share, with a market capitalization of $165.662 billion.

Heartland Mid Cap Value Fund stated the following regarding Lam Research Corporation (NASDAQ:LRCX) in its third quarter 2025 investor letter:

"Information Technology.  A standout Quality Value holding was Lam Research Corporation (NASDAQ:LRCX).  Lam is a supplier of semiconductor capital equipment (SemiCap) with a leading market position in technology integral to the production of the chip industry’s most advanced integrated circuits.

Over the past decade, the SemiCap industry has consolidated, with 5 companies controlling almost 75% of the market. Lam is dominant in the Etch market, a process by which chips are created by selectively removing materials from the wafer to transfer patterns. Industry consolidation and improved customer profitability helped create a structurally more profitable SemiCap industry over time. Lam’s leadership position with Memory customers proved fortuitous, as many of the key applications used by those customers became mission-critical for manufacturers producing today’s leading-edge chips (even outside of the Memory industry). This leaves the company uniquely positioned to gain share in an industry that already benefits from structurally higher customer capital intensity and growing base of recurring revenue. A cyclical downturn and market volatility earlier this year gave us the chance to buy shares at a compelling valuation. A new upcycle and clear market share gains helped drive strong recent performance in the shares."

Lam Research Corporation (NASDAQ:LRCX) is not on our list of 30 Most Popular Stocks Among Hedge Funds. As per our database, 85 hedge fund portfolios held Lam Research Corporation (NASDAQ:LRCX) at the end of the second quarter, which was 91 in the previous quarter. In the June quarter, Lam Research Corporation (NASDAQ:LRCX) reported revenue of $5.17 billion, representing an increase of 10% from prior quarter. While we acknowledge the potential of Lam Research Corporation (NASDAQ:LRCX) as an investment, we believe certain AI stocks offer greater upside potential and carry less downside risk. If you're looking for an extremely undervalued AI stock that also stands to benefit significantly from Trump-era tariffs and the onshoring trend, see our free report on the best short-term AI stock.

In another article, we covered Lam Research Corporation (NASDAQ:LRCX) and shared the list of best performing NASDAQ stocks according to hedge funds. In addition, please check out our hedge fund investor letters Q3 2025 page for more investor letters from hedge funds and other leading investors.

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Disclosure: None. This article is originally published at Insider Monkey.