- CNBC's Jim Cramer said Monday investors should keep an eye on Lam Research.
- However, it's important to wait until Thursday when Taiwan Semiconductor reports third-quarter earnings, the "Mad Money" host said.
- "If Taiwan Semi talks about multi-year growth, then I think you can buy Lam Research as, not just a trade, but a powerful, long-term American industrial investment," Cramer said.
CNBC's Jim Cramer said Monday investors should keep an eye on Lam Research, calling out the semiconductor equipment company as a potential stock to buy.
The "Mad Money" host cautioned, however, that before making a final decision, it's wise to wait until Taiwan Semiconductor releases third-quarter earnings Thursday.
"The biggest chipmaker in the world is about to report. If Taiwan Semi talks about multi-year growth, then I think you can buy Lam Research as, not just a trade, but a powerful, long-term American industrial investment," Cramer said.
In general, Cramer said Lam Research and other semiconductor equipment plays such as ASML Holding, KLA and Applied Materials have been seen as highly cyclical "because, typically, when there's endless demand and tons of price hikes, they end up making too much product to try to cash in on that demand, then demand collapses and their profits vanish."
However, Cramer said the chip shortage that arose during the Covid pandemic is highlighting larger trends that will likely support elevated levels of demand for a significant time.
"I'm beginning to think that the demand is so strong, these companies should have full order books for years and years, and the stocks are no longer expensive," Cramer said.
Cramer's charitable trust does not own any of the four aforementioned semiconductor equipment companies, but he noted that it used to own Lam Research a few years ago.
"We sold it because I was worried the semiconductor makers were double ordering as the supply of machines was so limited. We were right temporarily, but then the business came roaring back," Cramer said. "That strength has never really ebbed, even as Lam's stock has gotten fatigued. I think that's the one to buy here, but let's not get ahead of ourselves."
Taiwan Semiconductor's third-quarter conference call is set for 2 a.m. ET Thursday.
Questions for Cramer?
Call Cramer: 1-800-743-CNBC
Want to take a deep dive into Cramer's world? Hit him up!
Mad Money Twitter – Jim Cramer Twitter – Facebook – Instagram
Questions, comments, suggestions for the "Mad Money" website? [email protected]
Source: Read Full Article