Lam Research Corporation (NASDAQ: LRCX ) shares saw a significant increase of nearly 5% Tuesday ahead of the company's investor day today - the first since March 2020. Mizuho (NYSE: MFG )'s TMT Sector Specialist Jordan Klein commented that the surge may limit the stock's potential for further gains today. He highlighted Lam Research as a favorite among hedge funds, particularly due to its exposure to the NAND market, where expectations are rapidly improving.

Lam Research's recent earnings call suggested optimism for NAND Wafer Fabrication Equipment (WFE) growth in 2025, with the company indicating an upward trend. Despite NAND WFE recovering from historical lows, any growth is seen as a positive development. During the investor day, Lam Research is expected to emphasize its involvement in Gate-All-Around (GAA) technology and non-NAND areas such as High Bandwidth (NASDAQ: BAND ) Memory (HBM) and metal plating.

Klein anticipates that Lam Research will present a de-risked outlook, especially with China's market stabilizing. The focus will likely be on gross margin trends and the potential benefits from new products and technologies. The company has been investing heavily in research and development to capitalize on emerging trends in advanced semiconductor and memory production.

While long-term revenue growth rates are yet to be determined, Klein suggests that many investors will maintain their positions in Lam Research and may use peers such as Applied Materials (NASDAQ: AMAT ) or ASML (AS: ASML ) Holding (NASDAQ: ASML ) as hedges. Despite the high current positioning, he does not expect Lam Research's stock to experience significant movement from the investor day update.

Klein concluded that if NAND and DRAM stocks continue to rise, driven by momentum buying in anticipation of post-Q2 2025 pricing stabilization or improvement, Lam Research is likely to maintain its positive performance.

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