Lam Research: Underrated AI Star with Potential

Artificial Intelligence (AI) is gaining increasing importance across various industries, including less highlighted sectors such as utilities, mining, and media. AI tools are driving efficiency, safety, and innovation in these domains. In the utilities sector, AI plays a crucial role in improving the efficiency and reliability of power generation, distribution, and consumption. A notable application is predictive maintenance, where AI algorithms analyze data from sensors in infrastructures like power grids and pipelines. According to a report by McKinsey & Company, this technology can reduce maintenance costs by up to 40%, extend the lifespan of assets by 20%, and decrease unplanned outages by 50%. The mining industry, traditionally labor-intensive and dangerous, also benefits significantly from AI. Particularly noteworthy is the automation and autonomous operation with AI-controlled vehicles and machinery, which are already commonplace in large mining operations. According to a report by PwC, autonomous transport systems can reduce operating costs by up to 15% while simultaneously increasing productivity by 20%. Additionally, AI enhances mineral exploration and evaluation, thereby minimizing both exploration costs and environmental impacts. In the media sector, AI is revolutionizing content creation, distribution, and consumption. AI-driven algorithms increasingly personalize content suggestions, which is crucial for streaming platforms. According to Netflix, the AI-based recommendation engine saves over $1 billion annually by reducing customer churn and increasing viewing hours. AI also plays a vital role in combating digital piracy and protecting intellectual property. The global market for AI in the media and entertainment industry is expected to grow to $100 billion by 2030, with an average annual growth rate of 27% starting in 2023. Our focus is on Lam Research Corporation, a leading provider of etching equipment for the semiconductor industry. The stock shows a high return on capital and has the potential for more than 10% revenue growth in the coming months. Another positive aspect is the high likelihood of a price increase in memory chips next year, driven by demand from AI data centers. This could lead to an upward potential of 30% at the current cycle peak of earnings per share. Following an outstanding earnings report and positive analyst reviews, the stock forecast remains stable. Lam Research ranks third on our list of underestimated AI stocks. Despite its potential, we believe that some AI stocks could deliver higher returns in a shorter period.