Comprehensive Stock Comparison
Compare Lam Research Corporation (LRCX) vs Applied Materials, Inc. (AMAT) Stock
Analyze side-by-side fundamentals, valuation, growth, and profitability to decide which stock is the better buy.
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Quick Verdict
| Category | Winner | Why |
|---|---|---|
| Growth | LRCX | 23.7% revenue growth vs AMAT's 4.4% |
| Value | AMAT | Lower P/E (33.9x vs 44.0x) |
| Quality / Margins | LRCX | 30.2% net margin vs AMAT's 24.7% |
| Stability / Safety | AMAT | Beta 1.66 vs LRCX's 1.95, lower leverage |
| Dividends | LRCX | 0.4% yield, 11-year raise streak, vs AMAT's 0.5% |
| Momentum (1Y) | LRCX | +206.1% vs AMAT's +136.7% |
| Efficiency (ROA) | LRCX | 29.0% ROA vs AMAT's 19.3%, ROIC 55.7% vs 33.3% |
Who Each Stock Is For
Income & stability
Growth exposure
Long-term compounding (10Y)
Sleep-well-at-night portfolio
Valuation efficiency (growth/$)
Defensive / Recession hedge
Business Model
What each company does and how it makes money
Lam Research is a leading manufacturer of semiconductor fabrication equipment used to produce integrated circuits. The company generates revenue primarily from selling wafer fabrication equipment — including etch, deposition, and cleaning systems — and related services, with equipment sales typically representing around 80% of total revenue. Its competitive advantage stems from deep process expertise in critical semiconductor manufacturing steps, particularly in etch and deposition technologies where it holds strong market positions.
Applied Materials is the world's leading supplier of semiconductor manufacturing equipment and services. It generates about 70% of revenue from selling semiconductor fabrication systems — with the remaining 30% from services and display equipment — through its three main segments: Semiconductor Systems, Applied Global Services, and Display. Its competitive moat stems from its comprehensive portfolio across the entire chipmaking process and deep customer relationships with major foundries like TSMC, Intel, and Samsung.
Revenue Breakdown by Segment
How each company's revenue is distributed across its business units
Financial Metrics Comparison
Side-by-side fundamentals across 2 stocks. BestLagging
Financial Scorecard
LRCX leads in 3 of 6 categories (Financial Metrics, Profitability & Efficiency). AMAT leads in 2 (Valuation Metrics, Risk & Volatility). 1 tied.
Financial Metrics (TTM)
AMAT and LRCX operate at a comparable scale, with $28.4B and $20.6B in trailing revenue. LRCX is the more profitable business, keeping 30.2% of every revenue dollar as net income compared to AMAT's 24.7%. On growth, LRCX holds the edge at +22.1% YoY revenue growth, suggesting stronger near-term business momentum.
| Metric | LRCXLam Research Corp… | AMATApplied Materials… |
|---|---|---|
| RevenueTrailing 12 months | $20.6B | $28.4B |
| EBITDAEarnings before interest/tax | $7.3B | $8.4B |
| Net IncomeAfter-tax profit | $6.2B | $7.0B |
| Free Cash FlowCash after capex | $6.7B | $5.7B |
| Gross MarginGross profit ÷ Revenue | +49.8% | +48.7% |
| Operating MarginEBIT ÷ Revenue | +33.8% | +29.2% |
| Net MarginNet income ÷ Revenue | +30.2% | +24.7% |
| FCF MarginFCF ÷ Revenue | +32.4% | +20.1% |
| Rev. Growth (YoY)Latest quarter vs prior year | +22.1% | -3.5% |
| EPS Growth (YoY)Latest quarter vs prior year | +37.0% | +13.9% |
Valuation Metrics
At 43.0x trailing earnings, AMAT trades at a 24% valuation discount to LRCX's 56.4x P/E. Adjusting for growth (PEG ratio), AMAT offers better value at 2.50x vs LRCX's 2.52x — a lower PEG means you pay less per unit of expected earnings growth.
| Metric | LRCXLam Research Corp… | AMATApplied Materials… |
|---|---|---|
| Market CapShares × price | $292.6B | $295.2B |
| Enterprise ValueMkt cap + debt − cash | $291.0B | $294.5B |
| Trailing P/EPrice ÷ TTM EPS | 56.36x | 42.99x |
| Forward P/EPrice ÷ next-FY EPS est. | 43.97x | 33.87x |
| PEG RatioP/E ÷ EPS growth rate | 2.52x | 2.50x |
| EV / EBITDAEnterprise value multiple | 46.28x | 35.07x |
| Price / SalesMarket cap ÷ Revenue | 15.87x | 10.41x |
| Price / BookPrice ÷ Book value/share | 30.60x | 14.74x |
| Price / FCFMarket cap ÷ FCF | 54.05x | 51.81x |
Profitability & Efficiency
LRCX delivers a 61.2% return on equity — every $100 of shareholder capital generates $61 in annual profit, vs $34 for AMAT. AMAT carries lower financial leverage with a 0.32x debt-to-equity ratio, signaling a more conservative balance sheet compared to LRCX's 0.48x. On the Piotroski fundamental quality scale (0–9), LRCX scores 8/9 vs AMAT's 7/9, reflecting strong financial health.
| Metric | LRCXLam Research Corp… | AMATApplied Materials… |
|---|---|---|
| ROE (TTM)Return on equity | +61.2% | +34.3% |
| ROA (TTM)Return on assets | +29.0% | +19.3% |
| ROICReturn on invested capital | +55.7% | +33.3% |
| ROCEReturn on capital employed | +40.4% | +30.6% |
| Piotroski ScoreFundamental quality 0–9 | 8 | 7 |
| Debt / EquityFinancial leverage | 0.48x | 0.32x |
| Net DebtTotal debt minus cash | -$1.6B | -$686M |
| Cash & Equiv.Liquid assets | $6.4B | $7.2B |
| Total DebtShort + long-term debt | $4.8B | $6.6B |
| Interest CoverageEBIT ÷ Interest expense | 41.06x | 35.46x |
Total Returns (with DRIP)
A $10,000 investment in LRCX five years ago would be worth $39,693 today (with dividends reinvested), compared to $31,004 for AMAT. Over the past 12 months, LRCX leads with a +206.1% total return vs AMAT's +136.7%. The 3-year compound annual growth rate (CAGR) favors LRCX at 69.5% vs AMAT's 48.1% — a key indicator of consistent wealth creation.
| Metric | LRCXLam Research Corp… | AMATApplied Materials… |
|---|---|---|
| YTD ReturnYear-to-date | +26.4% | +38.6% |
| 1-Year ReturnPast 12 months | +206.1% | +136.7% |
| 3-Year ReturnCumulative with dividends | +386.6% | +224.6% |
| 5-Year ReturnCumulative with dividends | +296.9% | +210.0% |
| 10-Year ReturnCumulative with dividends | +3164.9% | +1926.2% |
| CAGR (3Y)Annualised 3-year return | +69.5% | +48.1% |
Risk & Volatility
AMAT is the less volatile stock with a 1.66 beta — it tends to amplify market swings less than LRCX's 1.95 beta. A beta below 1.0 means the stock typically moves less than the S&P 500.
| Metric | LRCXLam Research Corp… | AMATApplied Materials… |
|---|---|---|
| Beta (5Y)Sensitivity to S&P 500 | 1.95x | 1.66x |
| 52-Week HighHighest price in past year | $256.68 | $395.95 |
| 52-Week LowLowest price in past year | $56.32 | $123.74 |
| % of 52W HighCurrent price vs 52-week peak | +91.1% | +94.0% |
| RSI (14)Momentum oscillator 0–100 | 55.7 | 63.2 |
| Avg Volume (50D)Average daily shares traded | 10.1M | 6.3M |
Analyst Outlook
Wall Street rates LRCX as "Buy" and AMAT as "Buy". Consensus price targets imply 14.4% upside for LRCX (target: $268) vs 13.0% for AMAT (target: $421). For income investors, AMAT offers the higher dividend yield at 0.46% vs LRCX's 0.38%.
| Metric | LRCXLam Research Corp… | AMATApplied Materials… |
|---|---|---|
| Analyst RatingConsensus buy/hold/sell | Buy | Buy |
| Price TargetConsensus 12-month target | $267.50 | $420.83 |
| # AnalystsCovering analysts | 50 | 53 |
| Dividend YieldAnnual dividend ÷ price | +0.4% | +0.5% |
| Dividend StreakConsecutive years of raises | 11 | 8 |
| Dividend / ShareAnnual DPS | $0.89 | $1.71 |
| Buyback YieldShare repurchases ÷ mkt cap | +1.2% | +1.7% |
Historical Charts
Charts are rendered on first load. Hover for details.
Chart 1Total Return — 5 Years (Rebased to 100)
| Stock | Mar 20 | Feb 26 | Change |
|---|---|---|---|
| Lam Research Corpor… (LRCX) | 100 | 790.88 | +690.9% |
| Applied Materials, … (AMAT) | 100 | 545.88 | +445.9% |
Lam Research Corpor… (LRCX) returned +297% over 5 years vs Applied Materials, … (AMAT)'s +210%. A $10,000 investment in LRCX 5 years ago would be worth $39,693 today (including dividends reinvested).
Chart 2Revenue Growth — 10 Years
| Stock | 2016 | 2025 | Change |
|---|---|---|---|
| Lam Research Corpor… (LRCX) | $5.9B | $18.4B | +213.2% |
| Applied Materials, … (AMAT) | $10.8B | $28.4B | +162.1% |
Lam Research Corporation's revenue grew from $5.9B (2016) to $18.4B (2025) — a 13.5% CAGR. Applied Materials, Inc.'s revenue grew from $10.8B (2016) to $28.4B (2025) — a 11.3% CAGR.
Chart 3Net Margin Trend — 10 Years
| Stock | 2016 | 2025 | Change |
|---|---|---|---|
| Lam Research Corpor… (LRCX) | 15.5% | 29.1% | +87.2% |
| Applied Materials, … (AMAT) | 15.9% | 24.7% | +55.2% |
Lam Research Corporation's net margin went from 16% (2016) to 29% (2025). Applied Materials, Inc.'s net margin went from 16% (2016) to 25% (2025).
Chart 4P/E Ratio History — 9 Years
| Stock | 2017 | 2025 | Change |
|---|---|---|---|
| Lam Research Corpor… (LRCX) | 20 | 41.2 | +106.0% |
| Applied Materials, … (AMAT) | 16.1 | 29.7 | +84.5% |
Lam Research Corporation has traded in a 10x–41x P/E range over 9 years; current trailing P/E is ~56x. Applied Materials, Inc. has traded in a 11x–30x P/E range over 9 years; current trailing P/E is ~43x.
Chart 5EPS Growth — 10 Years
| Stock | 2016 | 2025 | Change |
|---|---|---|---|
| Lam Research Corpor… (LRCX) | 0.52 | 4.15 | +698.1% |
| Applied Materials, … (AMAT) | 1.54 | 8.66 | +462.3% |
Lam Research Corporation's EPS grew from $0.52 (2016) to $4.15 (2025) — a 26% CAGR. Applied Materials, Inc.'s EPS grew from $1.54 (2016) to $8.66 (2025) — a 21% CAGR.
Chart 6Free Cash Flow — 5 Years
Lam Research Corporation generated $5B FCF in 2025 (+67% vs 2021). Applied Materials, Inc. generated $6B FCF in 2025 (+19% vs 2021).
LRCX vs AMAT: Frequently Asked Questions
9 questions · data-driven answers · updated daily
01Is LRCX or AMAT a better buy right now?
Applied Materials, Inc. (AMAT) offers the better valuation at 43.0x trailing P/E (33.9x forward), making it the more compelling value choice. Analysts rate Lam Research Corporation (LRCX) a "Buy" — based on 50 analyst ratings — the highest consensus in this comparison. The "better buy" depends entirely on your goals: growth investors should weight revenue trajectory, value investors should weight P/E and PEG, and income investors should weight dividend yield and streak.
02Which has the better valuation — LRCX or AMAT?
On trailing P/E, Applied Materials, Inc. (AMAT) is the cheapest at 43.0x versus Lam Research Corporation at 56.4x. On forward P/E, Applied Materials, Inc. is actually cheaper at 33.9x. The PEG ratio (P/E divided by earnings growth rate) is the most growth-adjusted single valuation metric: Lam Research Corporation wins at 1.96x versus Applied Materials, Inc.'s 1.97x — a reasonable growth-adjusted valuation.
03Which is the better long-term investment — LRCX or AMAT?
Over the past 5 years, Lam Research Corporation (LRCX) delivered a total return of +296.9%, compared to +210.0% for Applied Materials, Inc. (AMAT). A $10,000 investment in LRCX five years ago would be worth approximately $40K today (assuming dividends reinvested). Over 10 years, the gap is even starker: LRCX returned +31.6% versus AMAT's +1926%. Past returns do not guarantee future results, and the stock with the higher historical return may already have its best growth priced in.
04Which is safer — LRCX or AMAT?
By beta (market sensitivity over 5 years), Applied Materials, Inc. (AMAT) is the lower-risk stock at 1.66β versus Lam Research Corporation's 1.95β — meaning LRCX is approximately 17% more volatile than AMAT relative to the S&P 500. On balance sheet safety, Applied Materials, Inc. (AMAT) carries a lower debt/equity ratio of 32% versus 48% for Lam Research Corporation — giving it more financial flexibility in a downturn.
05Which has better profit margins — LRCX or AMAT?
Lam Research Corporation (LRCX) is the more profitable company, earning 29.1% net margin versus 24.7% for Applied Materials, Inc. — meaning it keeps 29.1% of every revenue dollar as bottom-line profit. Operating margin tells a similar story: LRCX leads at 32.0% versus 29.2% for AMAT. At the gross margin level — before operating expenses — LRCX leads at 48.7%, reflecting greater pricing power or product mix advantage. Stronger margins indicate durable pricing power, lower cost of revenue, or higher mix of software/services. They are one of the clearest signs of business quality.
06Is LRCX or AMAT more undervalued right now?
The PEG ratio (forward P/E divided by expected earnings growth rate) is the most precise measure of undervaluation relative to growth potential. By this metric, Lam Research Corporation (LRCX) is the more undervalued stock at a PEG of 1.96x versus Applied Materials, Inc.'s 1.97x. Both stocks trade at elevated growth-adjusted valuations, so expected growth needs to materialise. On forward earnings alone, Applied Materials, Inc. (AMAT) trades at 33.9x forward P/E versus 44.0x for Lam Research Corporation — 10.1x cheaper on a one-year earnings basis. Analyst consensus price targets imply the most upside for LRCX: 14.4% to $267.50.
07Which pays a better dividend — LRCX or AMAT?
All stocks in this comparison pay dividends. Applied Materials, Inc. (AMAT) offers the highest yield at 0.5%, versus 0.4% for Lam Research Corporation (LRCX).
08Is LRCX or AMAT better for a retirement portfolio?
For long-horizon retirement investors, Applied Materials, Inc. (AMAT) is the stronger choice — it scores higher on the combination of lower volatility, dividend reliability, and long-term compounding (+1926% 10Y return). Lam Research Corporation (LRCX) carries a higher beta of 1.95 — meaning larger drawdowns in market downturns, which matters significantly when you cannot wait years for a recovery. Both have compounded well over 10 years (AMAT: +1926%, LRCX: +31.6%), confirming both are viable long-term holds — but the lower-volatility option typically results in less emotional selling during corrections. Retirement portfolios generally favour predictability over maximum returns. Consult a financial advisor before making allocation decisions.
09What are the main differences between LRCX and AMAT?
Both stocks operate in the Technology sector, making this a peer-level intra-sector comparison — the same macro tailwinds and headwinds will affect both. These fundamental differences mean investors should not choose between them on a single metric — the "better stock" depends entirely on which of these characteristics aligns with your investment strategy.
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