Lam Research Corporation

“Lam Research is among the highest-quality semiconductor equipment franchises globally — widening moat, rising etch intensity per wafer, net-cash balance sheet, 40-50% ROIC, and clean management — but at 46x forward earnings and ~106x TTM FCF, the price has already capitalized all the good news and then some. China export control risk represents genuine permanent TAM compression, and mean reversion in multiples from cyclical-peak levels is the most likely 3-5 year outcome. Even under optimistic assumptions, 10-year returns from current prices are mediocre. This is a TRACK: a great business to own at the right price, which is roughly 30-40% lower than today.”