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ADI vs LRCX
Which Stock Would AI Choose? Analog Devices (ADI) vs. Lam Research (LRCX) Stock Comparison
Key Takeaways
- Both ADI and LRCX reported earnings above analyst expectations, but ADI’s revenue fell sharply while LRCX’s top line held steady.
- ADI is focused on a cyclical recovery in industrial and automotive analog markets; LRCX benefits from AI‑driven demand for advanced wafer‑fab equipment.
- Liquidity remains strong for both: ADI holds $2.4 bn in cash, LRCX $5.7 bn, and both generate free cash flow exceeding 25 % of revenue.
- Recent market sentiment favors LRCX’s growth narrative, reflected in a higher relative strength and a modest price uptick versus ADI’s more volatile rebound.
- Both companies announced shareholder‑return initiatives—ADI’s $2.36 bn dividend‑plus‑repurchase program and LRCX’s $10 bn buyback with a 10‑for‑1 split.
Introduction
Analog Devices (ticker ADI) and Lam Research (ticker LRCX) are two leading semiconductor‑related stocks that have drawn attention from traders focused on the AI‑driven equipment cycle. ADI supplies analog and mixed‑signal chips for industrial, automotive, and communications markets, while LRCX designs and services wafer‑fabrication tools used to build the advanced nodes powering AI accelerators. This comparison is relevant for investors who balance exposure to end‑customer chip demand (ADI) with exposure to upstream equipment spend (LRCX) in a market still recovering from macro‑headwinds.
ADI Overview and Recent Performance
Analog Devices, a global semiconductor leader headquartered in Wilmington, Massachusetts, reported fiscal Q2 2024 results in mid‑May. The company posted adjusted earnings per share (EPS) of $1.40, beating the consensus of $1.26, on revenue of $2.16 bn, modestly above the midpoint of its outlook but still 34 % lower than a year ago. The decline reflects a deep‑seated cyclical downturn in industrial and automotive orders, with industrial sales down 44 % and automotive down 10 % year‑over‑year. CEO Vincent Roche highlighted “inventory rationalization” and a “beginning of a cyclical recovery,” noting that inventory levels across its broad customer base are stabilizing, setting the stage for sequential growth in Q3.
Financially, ADI generated $808 m of operating cash flow in the quarter, ending the period with $2.36 bn of cash and equivalents. Free cash flow came in at $620 m (≈29 % of revenue), supporting a $2.36 bn shareholder‑return program that includes dividends and share repurchases. The stock rallied roughly 6 % after the earnings beat, but volatility remains as analysts project two more quarters of modest declines before a full recovery. Key growth vectors include AI‑driven edge computing, where ADI expects its analog front‑end solutions to become integral to data‑center and edge‑device workloads.
LRCX Overview and Recent Performance
Lam Research, based in Fremont, California, is a leading supplier of wafer‑fabrication equipment for the semiconductor industry. In its fiscal Q3 2024 report released in late May, LRCX posted non‑GAAP EPS of $7.79, beating consensus by 7 % and delivering $3.79 bn of revenue—just 2 % below the year‑ago quarter but above analyst expectations. System revenue (63 % of total) fell 6 % YoY, while the Customer Support Business Group declined 13 % due to softer memory spending. Nonetheless, the company cited “modest improvement” in wafer‑fab spend driven by AI‑related lithography shipments to China.
LRCX’s balance sheet remains robust: $5.67 bn in cash and equivalents as of March 31 2024 and free cash flow of $1.38 bn for the quarter (≈36 % of revenue). The firm announced a $10 bn share‑repurchase authorization and a 10‑for‑1 stock split effective October 2 2024, underscoring confidence in its cash‑generation capacity. The stock gained about 5 % in pre‑market trading following the news, and a 6.3 % rise since the earnings release, outpacing the S&P 500.
Looking ahead, LRCX projects Q4 2024 revenue of $3.8 bn (±$0.3 bn) with a non‑GAAP operating margin around 29.5 % and EPS of $7.50 (±$0.75). The company’s growth outlook hinges on AI‑driven demand for advanced nodes, 3‑D DRAM, and high‑bandwidth memory (HBM) equipment, as well as continued expansion in China’s domestic fab market.
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Head‑to‑Head Comparison
- Business Model: ADI monetizes semiconductor designs sold directly to OEMs; LRCX sells capital‑intensive equipment and recurring services to fabs.
- Growth Drivers: ADI looks to AI at the edge, automotive electrification, and industrial automation; LRCX bets on AI‑enabled wafer‑fab spend, advanced packaging, and HBM demand.
- Recent Momentum: ADI’s price rebounded ~6 % post‑earnings but remains volatile; LRCX’s price rose ~5‑6 % on earnings and share‑buyback news, showing steadier momentum.
- Risk Factors: ADI faces cyclical demand swings and inventory pressure; LRCX is exposed to fab capital cycles, geopolitical tensions affecting China’s fab expansion, and high‑tech equipment lead times.
- Sector Exposure: Both sit within the broader semiconductor sector, yet ADI leans toward end‑customer “electronics” exposure, while LRCX is firmly in “equipment” (a sub‑industry with historically higher margins).
- Market Sentiment: Analysts have upgraded LRCX’s earnings outlook more aggressively, reflected in a higher relative‑strength rating, whereas ADI’s outlook remains cautious pending the next two quarters of recovery.
Tickeron AI Verdict
Based on observable factors—stronger free‑cash generation, a clear shareholder‑return plan, and a more upbeat earnings outlook—Tickeron’s AI models currently assign a marginally higher probability of upside to LRCX. The model cites LRCX’s consistent margin expansion, AI‑driven equipment demand, and the upcoming stock split as catalysts that could sustain price gains. ADI remains a compelling play for investors seeking exposure to the analog‑signal side of AI edge computing, but its near‑term volatility and inventory concerns temper the AI’s favorability rating.
Disclaimer
The information on this webpage is provided for general informational and educational purposes only and is not intended as investment advice, a recommendation to purchase or sell any security, or an offer or solicitation related to investments. It does not consider your personal financial situation, goals, or risk profile, and all investing carries inherent risks, including the possibility of losing your entire investment. For more details, please review our full disclaimer.
To compare these two companies we present long-term analysis, their fundamental ratings and make comparative short-term technical analysis which are presented below. The conclusion is ADI is a StrongBuy and LRCX is a Buy.
Long-Term Analysis
It is best to consider a long-term outlook for a ticker by using Fundamental Analysis (FA) ratings. The rating of 1 to 100, where 1 is best and 100 is worst, is divided into thirds. The first third (a green rating of 1-33) indicates that the ticker is undervalued; the second third (a grey number between 34 and 66) means that the ticker is valued fairly; and the last third (red number of 67 to 100) reflects that the ticker is undervalued. We use an FA Score to show how many ratings show the ticker to be undervalued (green) or overvalued (red).
ADI’s FA Score shows that 1 FA rating(s) are green whileLRCX’s FA Score has 4 green FA rating(s).
- ADI’s FA Score: 1 green, 4 red.
- LRCX’s FA Score: 4 green, 1 red.
Short-Term Analysis
It is best to consider a short-term outlook for a ticker by using Technical Analysis (TA) indicators. We use Odds of Success as the percentage of outcomes which confirm successful trade signals in the past.
If the Odds of Success (the likelihood of the continuation of a trend) for each indicator are greater than 50%, then the generated signal is confirmed. A green percentage from 90% to 51% indicates that the ticker is in a bullish trend. A red percentage from 90% - 51% indicates that the ticker is in a bearish trend. All grey percentages are below 50% and are considered not to confirm the trend signal.
ADI’s TA Score shows that 5 TA indicator(s) are bullish while LRCX’s TA Score has 4 bullish TA indicator(s).
- ADI’s TA Score: 5 bullish, 3 bearish.
- LRCX’s TA Score: 4 bullish, 4 bearish.
Price Growth
ADI (@Semiconductors) experienced а +4.09% price change this week, while LRCX (@Electronic Production Equipment) price change was +20.95% for the same time period.
The average weekly price growth across all stocks in the @Semiconductors industry was +4.34%. For the same industry, the average monthly price growth was +5.81%, and the average quarterly price growth was +92.59%.
The average weekly price growth across all stocks in the @Electronic Production Equipment industry was +17.31%. For the same industry, the average monthly price growth was +9.95%, and the average quarterly price growth was +135.39%.
Reported Earning Dates
ADI is expected to report earnings on Aug 26, 2026.
LRCX is expected to report earnings on Aug 05, 2026.
Industries' Descriptions
@Semiconductors (+4.34% weekly)The semiconductor industry manufacturers all chip-related products, including research and development. These chips are used in innumerable electronic devices, including computers, cell phones, smartphones, and GPSs. Intel Corporation, NVIDIA Corp., and Broadcomm are some of the prominent players in this industry. Semiconductor companies usually tend to do well during periods of healthy economic growth, thereby inducing further research and development in the industry – which in turn augurs well for productivity and growth in the economy. In the near future, demand for semiconductor products (and possibly innovation within the segment) should only expand further, with the proliferation of 5G, autonomous vehicles, IoT, and various AI-driven electronics set to herald a new, advanced chapter in the technology-driven world as we know it. With burgeoning prospects comes great competition. In 2015, SIA estimated that U.S. semiconductor industry ranks as the second most competitive U.S. industry out of 2882 U.S. industries designated manufacturers by the U.S. Census Bureau.
@Electronic Production Equipment (+17.31% weekly)The electronic production equipment industry makes equipment used to produce semiconductors. Such equipment includes wafer fabrication, plasma etching and photo-resist processing equipment. The industry also makes chemical vapor deposition processing systems and photomasks, which are high-purity quartz plates that contain patterns to define integrated circuits layouts. Applied Materials, Inc., Lam Research Corporation, and KLA-Tencor Corporation are examples of electronic production equipment manufacturing companies.
| ADI | LRCX | ADI / LRCX | |
| Capitalization | 204B | 459B | 44% |
| EBITDA | 6.23B | 8.07B | 77% |
| Gain YTD | 54.958 | 114.540 | 48% |
| P/E Ratio | 62.17 | 69.34 | 90% |
| Revenue | 12.7B | 21.7B | 59% |
| Total Cash | 3.44B | 4.75B | 72% |
| Total Debt | 8.69B | 3.73B | 233% |
ADI | LRCX | ||
|---|---|---|---|
OUTLOOK RATING 1..100 | 15 | 36 | |
VALUATION overvalued / fair valued / undervalued 1..100 | 56 Fair valued | 88 Overvalued | |
PROFIT vs RISK RATING 1..100 | 6 | 2 | |
SMR RATING 1..100 | 73 | 17 | |
PRICE GROWTH RATING 1..100 | 39 | 2 | |
P/E GROWTH RATING 1..100 | 53 | 6 | |
SEASONALITY SCORE 1..100 | 50 | 50 |
Tickeron ratings are formulated such that a rating of 1 designates the most successful stocks in a given industry, while a rating of 100 points to the least successful stocks for that industry.
ADI's Valuation (56) in the Semiconductors industry is in the same range as LRCX (88) in the Electronic Production Equipment industry. This means that ADI’s stock grew similarly to LRCX’s over the last 12 months.
LRCX's Profit vs Risk Rating (2) in the Electronic Production Equipment industry is in the same range as ADI (6) in the Semiconductors industry. This means that LRCX’s stock grew similarly to ADI’s over the last 12 months.
LRCX's SMR Rating (17) in the Electronic Production Equipment industry is somewhat better than the same rating for ADI (73) in the Semiconductors industry. This means that LRCX’s stock grew somewhat faster than ADI’s over the last 12 months.
LRCX's Price Growth Rating (2) in the Electronic Production Equipment industry is somewhat better than the same rating for ADI (39) in the Semiconductors industry. This means that LRCX’s stock grew somewhat faster than ADI’s over the last 12 months.
LRCX's P/E Growth Rating (6) in the Electronic Production Equipment industry is somewhat better than the same rating for ADI (53) in the Semiconductors industry. This means that LRCX’s stock grew somewhat faster than ADI’s over the last 12 months.
| ADI | LRCX | |
|---|---|---|
| RSI ODDS (%) | 2 days ago 65% | 2 days ago 64% |
| Stochastic ODDS (%) | 2 days ago 63% | 2 days ago 74% |
| Momentum ODDS (%) | 2 days ago 63% | 2 days ago 85% |
| MACD ODDS (%) | 2 days ago 63% | 2 days ago 77% |
| TrendWeek ODDS (%) | 2 days ago 63% | 2 days ago 81% |
| TrendMonth ODDS (%) | 2 days ago 60% | 2 days ago 81% |
| Advances ODDS (%) | 2 days ago 62% | 2 days ago 82% |
| Declines ODDS (%) | 9 days ago 54% | 9 days ago 64% |
| BollingerBands ODDS (%) | 2 days ago 64% | 2 days ago 73% |
| Aroon ODDS (%) | 2 days ago 65% | 2 days ago 81% |
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ADI and
Correlation & Price change
A.I.dvisor indicates that over the last year, ADI has been closely correlated with LRCX. These tickers have moved in lockstep 79% of the time. This A.I.-generated data suggests there is a high statistical probability that if ADI jumps, then LRCX could also see price increases.
| Ticker / NAME | Correlation To ADI | 1D Price Change % | ||
|---|---|---|---|---|
| ADI | 100% | +1.37% | ||
| LRCX - ADI | 79% Closely correlated | +1.18% | ||
| KLAC - ADI | 79% Closely correlated | +5.55% | ||
| ENTG - ADI | 78% Closely correlated | +3.86% | ||
| KLIC - ADI | 77% Closely correlated | +1.17% | ||
| MCHP - ADI | 76% Closely correlated | +2.47% | ||
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