Public trading strategy
Wall Street upgrades pile up for chip gear makers as AI spending boom continues
Thesis
Both BofA and Citi drastically raised their price targets for Lam Research, pointing to a $250 billion wave of chip manufacturing investment. Separately, Yahoo Finance notes that Micron is seeing Nvidia-level demand for memory chips. Connecting the dots, the massive demand for AI memory chips directly translates to a multi-year boom for the equipment makers like Lam Research who supply the necessary machinery. This creates a strong fundamental backdrop to buy the equipment makers.
Strategy approach
Build a rule-based strategy that enters long LRCX on D1 when both LRCX and MU (memory sector proxy) show positive momentum (close > 10-day SMA). Add to the position when major analyst upgrades occur. Use a 12% trailing stop and a 45-day max hold.