US Stocks Semiconductor Special Session (3) - 40000x AMAT & 6000x LRCX

Today we continue discussing the U.S. stock semiconductor track. Don’t think there are many semiconductor companies; in fact, there are only a few leaders at present, and we’ve basically covered most of them. Initially, when I started talking about U.S. stocks, I was also overwhelmed—so many companies, how to differentiate and analyze them? But step by step, I’ve accumulated knowledge and now remember almost all the companies and the classification of semiconductor tracks.

After finishing the semiconductor company introductions, I will also categorize the leaders of different tracks, so remember to follow the program.

Yesterday I talked about KLAC, KLA Corporation, which is truly a magical and long-term profitable company. It belongs to the inspection segment, so let’s dig deeper into a few companies in this track.

1. Applied Materials (AMAT)

This company primarily sells “chip manufacturing equipment,” focusing on deposition, CMP, ion implantation, and other comprehensive tools! Many people think chip manufacturing is just about lithography machines—the specialty of ASML. However, chip manufacturing involves many steps. Before lithography on the silicon wafer, a “deposition” operation is required.

It involves layering various materials onto the silicon wafer surface, ultimately forming complex structures like transistors, wires, and insulating layers. Think of it like building a building: you lay rebar and concrete on the foundation, then repeat the process to erect the structure. In the AI era, GPUs have increasingly more layers, so you constantly need to cover the silicon wafer surface with conductive and insulating layers. The precision of this operation is at the 0.1nm level, so globally, only a few companies can achieve this! This is AMAT’s absolute core moat.

Besides deposition equipment, its most profitable business, it also supplies “ion implantation” equipment. Ion implantation involves doping silicon with conductive ions because silicon itself has poor conductivity. The equipment is a particle accelerator, costing anywhere from millions to tens of millions of dollars.

CMP (Chemical Mechanical Polishing): After each deposition layer, polishing is required—this is relatively easy to understand.

AMAT’s main customers are shovel companies like Micron, SK Hynix, Samsung, NVIDIA, and Intel, so it is almost a “shovel of shovels” company.

Currently, its market cap is 574 billion, with a P/E ratio of 65x. In recent years, its revenue has been very stable, around 28 billion, net income 7 billion, and net profit margin 25%. The 2026 revenue estimate is 33 billion, with Q1 and Q2 2026 earnings showing about 10% sequential growth.

However, the stock price has already hit new highs. Looking at the monthly chart, the company has been in a constant growth state. From the low of 0.017 in 1977, it has risen 41,000 times. From 150 in June 2025, it has also risen 5 times. So sometimes, you don’t realize it until you check—US stocks are truly a “magical” place!

2. Lam Research

Lam Research (LRCX) is the world’s second-largest semiconductor equipment company (by revenue, just behind AMAT) and the absolute leader in global etching equipment.

Lam’s two core businesses are:

-Plasma Etch

-Wafer Cleaning

The etching step is the next step after AMAT’s deposition. After AMAT lays down the materials, the lithography machine patterns them, and then LRCX removes the unwanted parts.

Don’t think this is simple—it is extremely difficult, involving atomic-level nanoscale carving. The core technology is high-aspect-ratio etching (look it up). Each machine sells for millions to tens of millions of dollars, and this track also has a very deep moat.

LRCX’s current market cap is 541.9 billion, with a P/E ratio of 77x. Its current revenue is stable at 18 billion, with net income of 5 billion. The 2026 revenue estimate is 23 billion, 2027 estimate 30 billion, and the expected growth rate over the next four years is 20%.

LRCX’s stock price is also at new highs. From the low of 0.07 in 1990, it is now 425, an increase of 6,000 times. From 80 in June 2025, it has also risen 5 times.

Due to space limitations, I’ll cover two of the four major leaders in semiconductor equipment first. Both are absolute leaders, irreplaceable, and look very good in the long term.